Factory clearance valuation must reflect bulk-pack price, and later retail repacking cannot justify extended limitation.

Excise duty valuation for detergent cleared in 25 kg bulk packs had to be based on the condition and price at the time and place of removal, so the later repacking of goods into retail sachets could not justify adopting the retail pack price for factory clearance value. The post-repacking retail price was therefore not a valid basis for assessment. On limitation, the assessee had consistently disclosed valuation on a cost-of-production basis and the department had prior opportunity to examine that method, so the record did not show suppression of material facts with intent to evade duty. The extended period was unavailable and the demand was time-barred.

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Issues: (i) Whether the assessable value of detergent cleared in bulk packing could be determined with reference to the price of retail packs after repacking; and (ii) whether the demand was barred by limitation and the extended period could be invoked.

Issue (i): Whether the assessable value of detergent cleared in bulk packing could be determined with reference to the price of retail packs after repacking.

Analysis: The goods removed from the factory were 25 kg bulk packs, and duty had to be assessed on the basis of the condition and price of the goods at the time and place of removal. The subsequent repacking of the goods into smaller sachets at another premises could not control the valuation of the bulk packs. Bulk packs and retail packs were not comparable goods for valuation purposes, and the later retail price could not be adopted for the factory clearance value.

Conclusion: The valuation based on the post-repacking retail price was not sustainable, and the issue was decided in favour of the assessee.

Issue (ii): Whether the demand was barred by limitation and the extended period could be invoked.

Analysis: The assessee had consistently declared valuation on the basis of cost of production, and the same practice had been accepted for earlier and later periods. The price list disclosed the relevant basis of valuation, so the department had the opportunity to examine the claim. On those facts, the dispute for the relevant period reflected a change of view rather than suppression of facts with intent to evade duty.

Conclusion: The extended period was not available, and the demand was time-barred; this issue was decided in favour of the assessee.

Final Conclusion: The impugned demand and valuation approach were set aside, and the appeal succeeded with consequential relief.

Ratio Decidendi: Excise duty valuation must be based on the goods as cleared from the factory at the time and place of removal, and the extended limitation period cannot be invoked absent suppression of material facts with intent to evade duty.

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