Excise valuation for consignment-agent clearances follows the factory-gate normal price when the final buyer is unknown at removal.

Excise valuation of goods cleared to consignment agents was governed by the normal price applicable at the time of removal when the ultimate buyer was not identifiable. Where goods were sold under different price categories and the factory-gate clearance was made before the final buyer was known, the relevant assessable value was the price for the applicable class of buyers at removal, not a later revised price based on actual sales. Acceptance of a bond under Rule 9-B did not change the valuation principle under Section 4(1)(a).

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Issues: Whether excise duty on clearances made to consignment agents was to be assessed on the price applicable to the highest category of buyers or on the basis of the price applicable to the coal India category under the scheme of different classes of buyers.

Analysis: The goods were sold under three distinct price categories. The clearances to consignment agents were made from the factory to up-country magazines, and at the time of removal the final buyer was not known. In such a situation, the price to be adopted was the normal price applicable at the time of removal. The fact that differential duty was later worked out on actual sales did not alter the character of the clearance at the factory gate. The bond under Rule 9-B had been accepted, but that did not affect the valuation principle under Section 4(1)(a) where the buyer at the time of removal was not identifiable.

Conclusion: The clearances to consignment agents were correctly assessed on the normal price applicable to the third category of buyers, and the demand of differential duty was sustainable.

Ratio Decidendi: Where excisable goods are removed to consignment agents and the ultimate buyer is not known at the time of removal, valuation is governed by the normal price applicable at the factory gate for the relevant class of buyers at that point of removal.

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