Comparable goods valuation governs cut fabric samples; prime fabric value cannot be applied by mere proportion.

Fabric sample cut pieces removed by a manufacturer were not to be valued by taking the proportionate price of prime fabric merely because they were cut from the same cloth. Their assessable value had to be determined under the normal valuation rule by reference to comparable goods, and where the samples were not sold in the ordinary course, the nearest ascertainable equivalent had to be used. Because prices of fents and rags were available and provided a more appropriate comparison, that basis prevailed over a pro rata adoption of the value of good quality fabric. The demand based on prime fabric value was therefore not sustainable.

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Issues: Whether the assessable value of fabric sample cut pieces removed by a manufacturer was to be determined by reference to the price of prime fabric or by comparison with value of fents and rags as comparable goods.

Analysis: The sample pieces were small cut pieces, up to 50 cms., and were not to be equated in value or quality with prime fabric merely because they were cut from the same cloth. The valuation of excisable goods had to follow the normal rule of ascertainment of price of comparable goods, and where samples were not sold in the ordinary course, the nearest ascertainable equivalent had to be worked out under the valuation rules. Since comparable prices of fents and rags were available, those prices provided a more appropriate basis than a pro rata adoption of the value of good quality fabrics. The basis adopted by the lower authorities, treating the samples as if they retained the full value of prime cloth, was therefore not sustainable.

Conclusion: The samples were required to be valued on the basis of comparable goods and not on the proportionate value of prime fabric, and the demand confirmed by the lower authorities could not stand.

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