Ex-factory valuation principle governs where contemporaneous price lists exist; ignoring them makes the assessment vulnerable to remand.

Where an ex-factory price is ascertainable from contemporaneous Part I price lists, valuation under Section 4(1)(a) must be examined on that basis even if some clearances are routed through depots. The adjudicating authority's reliance on depot prices, without addressing the existence and relevance of the filed price lists and other contemporaneous records, showed lack of proper consideration of the material on record. The valuation was therefore reopened, and the order was set aside with a direction for de novo adjudication after giving the assessee an opportunity of personal hearing.

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Issues: (i) Whether the assessable value of compressors sold partly through depots and partly from the factory gate had to be determined on the basis of the ex-factory price under Section 4(1)(a) of the Central Excises and Salt Act, 1944, when price lists in Part I were stated to have been filed; and (ii) whether the adjudication order required interference and remand for fresh consideration on the contemporaneous record.

Issue (i): Whether the assessable value of compressors sold partly through depots and partly from the factory gate had to be determined on the basis of the ex-factory price under Section 4(1)(a) of the Central Excises and Salt Act, 1944, when price lists in Part I were stated to have been filed?

Analysis: The record showed that the assessee had filed price lists in Part I for sales to independent buyers, apart from Part II price lists and depot sales. The governing principle applied was that where the ex-factory price is ascertainable, that price forms the basis of valuation even if some clearances are made through depots. The impugned order did not explain why the asserted ex-factory price and the contemporaneous price lists were not accepted, despite recording their existence.

Conclusion: The valuation issue could not be upheld on the basis adopted by the adjudicating authority and required fresh determination.

Issue (ii): Whether the adjudication order required interference and remand for fresh consideration on the contemporaneous record?

Analysis: The impugned order was found to suffer from lack of application of mind because it proceeded on depot prices without addressing the relevance of the Part I price lists and other contemporaneous material. In these circumstances, the proper course was to set aside the order and direct de novo adjudication after granting the assessee an opportunity of personal hearing.

Conclusion: The order was set aside and the matter was remanded for de novo adjudication.

Final Conclusion: The dispute on valuation was reopened for fresh decision on the basis of the contemporaneous records, and the assessee obtained relief by way of remand.

Ratio Decidendi: Where ex-factory price is ascertainable from contemporaneous price lists, valuation under Section 4(1)(a) must be examined on that basis, and an order that ignores such material is liable to be set aside for fresh adjudication.

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