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Issues: Whether the specially reduced invoice price at which goods were sold by the manufacturer to its employees could be accepted as the assessable value under Notification No. 120/75-C.E. dated 30-4-1975.
Analysis: Notification No. 120/75, though a statutory notification under Rule 8(1) of the Central Excise Rules, 1944, could not override the valuation principles in Section 4 of the Central Excises and Salt Act. Under Section 4, excisable goods are to be valued on the basis of the normal price, meaning the price at which such goods are ordinarily sold in the course of wholesale trade to a buyer not being a related person and where price is the sole consideration. Sales to employees under a special agreement, at a concessional price, were not sales in the course of wholesale trade and therefore the reduced price could not be treated as the proper assessable value.
Conclusion: The reduced employee price was not acceptable as the assessable value, and the issue was decided against the assessee and in favour of Revenue.
Ratio Decidendi: A concessional price arising from a special arrangement with employees cannot be treated as the normal price for excise valuation, and a notification under Rule 8(1) cannot displace the valuation scheme under Section 4.
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