Factory-gate valuation and provisional-assessment refund limitation govern excise duty disputes involving stock transfers and DD-2 demands.

Excise refund claims arising from provisional assessment under Rule 9B run from the date the assessment is finalised, not from earlier stock-transfer clearances; the corresponding refund limitation under Rule 11 therefore begins on finalisation, including the date of the relevant DD-2 demand. Where wholesale sales were available at the factory gate, Section 4 required valuation on the factory-gate wholesale cash price at the time and place of removal, not on the later ex-depot sale price. Refund claims for periods before 19-8-1974 were time-barred because the assessments were not provisional for that period, and the challenge to differential duty paid against DD-2 demands also failed as time-barred.

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Issues: (i) Whether the stock-transfer clearances were under provisional assessment under Rule 9B of the Central Excise Rules, 1944, and from when the limitation for refund under Rule 11 began to run; (ii) whether the assessable value of the goods had to be based on the ex-depot sale price or on the wholesale price at the factory gate; (iii) whether the claim for refund of the differential duty paid against DD-2 demands was barred by limitation under Rule 11.

Issue (i): Whether the stock-transfer clearances were under provisional assessment under Rule 9B of the Central Excise Rules, 1944, and from when the limitation for refund under Rule 11 began to run.

Analysis: The arrangement between the parties was treated as provisional in the statutory sense only from the date on which the B13 bond was executed and the price-approval endorsement expressly operated as provisional under Rule 9B. For that period, the provisional assessments stood finalised when the corresponding DD-2 demand was issued under Rule 9B(5), and the refund limitation under Rule 11 commenced from that date of finalisation.

Conclusion: The assessments were provisional only from 19-8-1974 onwards, and the limitation for refund for that period ran from the date of the relevant DD-2 demand.

Issue (ii): Whether the assessable value of the goods had to be based on the ex-depot sale price or on the wholesale price at the factory gate.

Analysis: Under Section 4 of the Central Excises and Salt Act, 1944, valuation turns on the price at the time and place of removal. Where wholesale sales were available at the factory gate, the wholesale cash price at that stage was ascertainable and the later ex-depot price could not govern assessable value for the stock-transferred goods.

Conclusion: The assessable value had to be determined by the factory-gate wholesale price, not by the ex-depot sale price.

Issue (iii): Whether the claim for refund of the differential duty paid against DD-2 demands was barred by limitation under Rule 11.

Analysis: The refund claim relating to the period before 19-8-1974 was time-barred because the assessments for that period were not provisional. The challenge to the differential duty paid pursuant to DD-2 demands also failed because the appellants paid the demands without protest and did not seek refund within the prescribed limitation period after finalisation of the provisional assessments.

Conclusion: The refund claim was barred by limitation for the pre-19-8-1974 period and the claim against the DD-2 payments was also time-barred.

Final Conclusion: The first appeal succeeded only to the limited extent of refund claims falling within limitation after 19-8-1974, while the remainder of the refund claims and the separate challenge to the differential-duty payments failed.

Ratio Decidendi: For excise refund claims arising from provisional assessment, limitation runs from the date of finalisation of the provisional assessment, and assessable value must be based on the price at the time and place of removal where a wholesale factory-gate price is available.

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