Factory-to-depot valuation follows price at removal; refund of differential duty fails without proof of lower depot prices.

Valuation of excisable goods transferred from a factory to a depot must be based on the price at the time and place of removal under Section 4 of the Central Excise Act, 1944 and the valuation rules. Where depot sales are not available on the relevant date, the nearest relevant depot price may be adopted, but only on evidence showing that such price was lower than the factory gate price. In the absence of proof of lower depot prices, a refund claim for differential duty is not sustainable, and the original valuation based on prices prevailing on the dates of clearance remains effective.

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Issues: Whether duty on excisable goods transferred from factory to depot was to be reassessed on the basis of lower depot prices prevailing on the date of transfer, and whether refund of differential duty was admissible in the absence of evidence establishing such lower prices.

Analysis: The valuation scheme under Section 4 of the Central Excise Act, 1944 read with the valuation rules requires assessment on the basis of the price at the time and place of removal. Where factory gate sales and depot transfers occur around the same time, the assessee must adopt the normal transaction value relevant to the time of removal, and where identical goods are not sold at the depot on that date, the nearest relevant depot price may be taken. The record contained no evidence proving that the depot prices on the relevant dates were lower than the factory gate prices. The finding of the original authority that the goods were cleared to depots at prices prevalent on those dates remained uncontroverted.

Conclusion: The claim for refund was not sustainable, and the Commissioner (Appeals) was wrong in allowing it.

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