Transaction value governs excise valuation where invoice price is lower and no extra consideration or flow back is shown.

For valuation of excisable goods, the actual invoice price prevailed over an earlier price declaration under Rule 173C where there was no allegation or finding of extra consideration, flow back, or any amount recovered over the invoice value. The earlier declaration was only procedural and could not override the transaction value for the relevant clearances. On that basis, duty demand could not be sustained, and the connected levy of interest and penalty also failed.

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Issues: Whether, for clearances of excisable goods, the assessable value could be determined on the basis of an earlier price declaration under Rule 173C of the Central Excise Rules, 1944, despite the goods being actually sold at a lower invoice price and there being no allegation of additional consideration or flow back, and whether the demand of duty, interest and penalty could be sustained.

Analysis: The relevant valuation was governed by Section 4 of the Central Excise Act, 1944, read with Rule 173C of the Central Excise Rules, 1944. The price declaration filed earlier was only procedural in nature and could not override the actual transaction value shown in the invoices for the relevant period. The record contained no finding that the assessee recovered any amount over and above the invoice price, nor any allegation of flow back. In the absence of such material, the lower invoice price represented the sole consideration for sale and was the proper basis for valuation. The demand could not, therefore, be built merely on the basis of an old declaration, and the same reasoning defeated the consequential levy of interest and penalty.

Conclusion: The demand was unsustainable, and the assessee succeeded on valuation as well as on the connected levy of interest and penalty.

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