Excise valuation of drug formulations must follow wholesale price, not DPCO retail ceiling price.

For valuation of scheduled drug formulations under Section 4 of the Central Excise Act, 1944, the relevant benchmark is the wholesale price, not a retail ceiling price fixed under the Drug Prices Control Order, 1995. The note explains that the products were formulations, and the ceiling price under Paras 7 and 9 of the DPCO was a retail price. Because that price did not correspond to the wholesale price required for excise valuation, it could not be substituted as the assessable value. On that basis, the Revenue's valuation approach was rejected as unsustainable.

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Issues: Whether, for valuation of scheduled drug formulations under Section 4 of the Central Excise Act, 1944, the ceiling price fixed under the Drug Prices Control Order, 1995 could be taken as the normal price.

Analysis: The products in dispute were formulations, not bulk drugs. The ceiling price under the Drug Prices Control Order, 1995 was fixed as a retail price under Paras 7 and 9, whereas valuation under Section 4 required consideration of the wholesale price. Since the ceiling price was a retail price and not the wholesale price relevant for excise valuation, it could not govern the assessable value of the goods.

Conclusion: The demand was not sustainable and the valuation adopted by the Revenue was rejected.

Ratio Decidendi: For valuation under Section 4 of the Central Excise Act, 1944, the relevant benchmark is the wholesale price, and a retail ceiling price fixed under the Drug Prices Control Order, 1995 cannot be substituted for it.

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