Alternative valuation basis under exemption notification permits retail-price discount where notification conditions are met, regardless of wholesale sales.

An exemption notification for patent or proprietary medicines allowed two alternative valuation bases: wholesale price with a 10% discount or retail price with a 25% discount. The manufacturer's choice was not controlled by whether sales were actually made in wholesale trade, because the notification contained no qualifying words tying the election to the mode of sale. The only condition for the retail-price basis was that medicines sold at retail be priced at or below the specified limit, and no finding showed that this condition was breached. The manufacturer could therefore adopt the retail-price basis with the 25% discount, and a duty demand confined to the wholesale-price basis was not sustainable.

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Issues: Whether, under the exemption notification for patent or proprietary medicines, the manufacturer could opt for valuation on the retail price basis with a 25% discount irrespective of the fact that the sales were made in wholesale trade, and whether the duty demand could be sustained on the contrary view.

Analysis: The notification provided two distinct bases of computation, one on wholesale price with 10% discount and the other on retail price with 25% discount. The absence of qualifying words linking the choice to the actual pattern of sale showed that the assessee's selection between the two methods was not controlled by whether the manufacturer sold in wholesale or retail. The condition for the retail-price method was only that the medicines, when sold at retail, should be sold at or below the specified price. The order also recorded no finding that the retail prices exceeded the prices adopted for excise duty payment.

Conclusion: The assessee was entitled to claim the exemption on the retail-price basis with 25% discount, and the demand based on restricting the benefit to the wholesale-price basis could not be sustained.

Final Conclusion: The assessee succeeded on merits, and the departmental challenge was rejected.

Ratio Decidendi: Where an exemption notification offers alternative valuation bases without making the assessee's choice dependent on the actual mode of sale, the assessee may elect the more beneficial basis so long as the notification's own conditions are satisfied.

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