Separate contract and non-contract sales may be valued differently; absence of suppression defeats extended limitation.

Contracted sales and additional sales to the same buyer were treated as separate commercial transactions, so the negotiated price for contracted quantities did not require all clearances to be valued at a single higher assessable value; duty applied on the respective transaction values, and the valuation objection failed. The demand for March 1985 was time-barred because the Department had been given the relevant contracts and particulars, there was no suppression of facts, and no material showed intent to evade duty; the extended limitation period under the proviso to Section 11A(1) could not be invoked. The impugned order was set aside and the assessee obtained complete relief.

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Issues: (i) Whether duty was payable on the higher assessable value for all clearances when the manufacturer sold contracted quantities at a negotiated price and additional quantities to the same buyer at the normal wholesale price; (ii) Whether the demand for March 1985 was barred by limitation under the proviso to Section 11A(1) of the Central Excise Act.

Issue (i): Whether duty was payable on the higher assessable value for all clearances when the manufacturer sold contracted quantities at a negotiated price and additional quantities to the same buyer at the normal wholesale price.

Analysis: The purchase under the supply contract and the additional purchase outside the contract were treated as distinct commercial transactions. The negotiated price for the contracted quantity did not preclude the manufacturer from charging a higher price for quantities not covered by the contract. The fact that the same buyer made both types of purchases did not, by itself, require both to be assessed at a single price.

Conclusion: The differential prices were permissible and duty was payable on the respective transaction values; the valuation objection failed in favour of the assessee.

Issue (ii): Whether the demand for March 1985 was barred by limitation under the proviso to Section 11A(1) of the Central Excise Act.

Analysis: The Department was furnished with the relevant particulars, including the contracts. There was no suppression of facts and no material to show any intention to evade duty. The conditions for invoking the extended period were therefore not satisfied.

Conclusion: The demand for March 1985 was time-barred and the limitation objection succeeded in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed, resulting in complete relief to the assessee.

Ratio Decidendi: Where contracted sales and non-contracted sales are separate transactions at different prices and the Department is informed of the relevant facts, the goods may be assessed on their respective prices and the extended limitation period cannot be invoked absent suppression of facts or intent to evade duty.

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