Factory-gate excise valuation governs branded goods sold to a buyer, not the buyer's later resale price.

Where goods are manufactured for a buyer and sold under the buyer's trade name, assessable value is to be taken from the manufacturer's factory-gate wholesale price if that price is ascertainable, rather than the buyer's later resale price. The arrangement was treated as a sale of future goods between independent parties, not as a hiring of the manufacturer as the buyer's agent or labour. Delivery and title-passing terms at the buyer's godown did not displace the factory-gate valuation basis, and manufacture to specifications, approval procedures, or branding did not by themselves negate an arm's length wholesale sale.

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Issues: Whether the assessable value of dry cell batteries manufactured for a buyer and sold under the buyer's trade name was to be determined on the basis of the price charged by the manufacturer to the buyer or the price at which the buyer resold the goods to its customers.

Analysis: The agreement between the parties was treated as a sale of future goods between independent parties and not as a case where the buyer had engaged the manufacturer as its hired agent or labour. The relevant excise valuation principle was that, where a wholesale price at the factory gate is ascertainable, assessable value must be based on that price and not on the buyer's later resale price. The delivery arrangement was regarded as one at the seller's premises, even though title was to pass only on acceptance at the buyer's godown, and such a covenant did not displace the factory-gate wholesale price. Manufacture to the buyer's specifications, approval mechanism, branding, and similar commercial arrangements did not by themselves negate an arm's length wholesale sale.

Conclusion: The assessable value had to be determined on the basis of the price at which the manufacturer sold the goods to the buyer, and not on the price at which the buyer sold them onward.

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