Provisional valuation of raw naphtha must follow actual transaction value at intermediate storage clearance, not refinery price.

Where raw naphtha is provisionally assessed at the refinery because final value is not ascertainable, and is later sold or otherwise cleared from an intermediate storage location, valuation must be based on the actual transaction value prevailing at that later clearance. The provisional refinery price cannot control assessable value once the goods are dealt with from the intermediate storage point. The assessable value was therefore held to be the transaction value at the intermediate storage location, not the original provisional price.

---

---

Issues: Whether, for raw naphtha cleared on provisional assessment to an intermediate storage location and later sold or otherwise dealt with from that location, the assessable value had to be determined on the provisional refinery price or on the actual transaction value prevailing at the time of clearance from the intermediate storage location.

Analysis: The goods were initially cleared on provisional assessment because the final value could not be ascertained at the time of removal from the refinery. The disputed quantity was later sold from the intermediate storage location at the prevailing transaction value, and the balance quantity lost in transit was also valued by reference to the value prevailing for clearance from that location. In these circumstances, the provisional price adopted at the refinery stage could not govern valuation when the actual sale and relevant clearance occurred later from the intermediate storage location. The appropriate basis was the transaction value at the time of such clearance.

Conclusion: The assessable value had to be determined on the actual transaction value at the intermediate storage location and not on the provisional refinery price; the issue was decided in favour of the assessee.

Ratio Decidendi: Where goods are provisionally assessed because their value is not ascertainable at the time of removal, and they are later cleared or sold from an intermediate storage location, valuation must follow the actual transaction value at that later clearance and not the original provisional price.

---