Wholesale valuation for industrial consumers fails where higher-priced sales are only isolated transactions and no separate market is proved.

Industrial consumers purchasing their requirements in wholesale may form a class of wholesale buyers for valuation under section 4 of the Central Excises law, but stray or isolated sales to such buyers at higher prices do not by themselves establish a separate wholesale market. On the facts, the department relied only on a few isolated transactions, while the assessee consistently treated them as retail sales and no material showed that they were not retail. Prior departmental correspondence also indicated that retail price lists had been returned as unnecessary when the wholesale price was known. The differential duty demand was therefore not sustainable.

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Issues: Whether isolated sales to industrial consumers at higher prices justified a differential duty demand by treating those buyers as a separate wholesale class for valuation under section 4 of the Central Excises law.

Analysis: Industrial consumers purchasing their requirements in wholesale can be treated as a class of wholesale buyers for valuation purposes, but stray or isolated sales to industrial consumers at higher prices do not by themselves establish a wholesale market distinct from the approved wholesale price. On the facts, the sales relied upon by the department were only a few stray transactions, the respondent consistently maintained that they were retail sales, and no material was produced to show that the sales were not retail. The prior departmental correspondence also supported the view that retail price lists had been returned as unnecessary when wholesale price was known.

Conclusion: The differential duty demand was not sustainable and the appeal failed.

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