Excise valuation of employee sales: later approved price list upheld where declared experimental price did not reflect normal wholesale value.

Motorcycles cleared to employees were not treated as sales to related persons because there was no mutuality of interest in each other's business. For excise valuation, however, the declared price of Rs. 3,510 per unit was not accepted as the normal price, since the sales were made during an experimental stage, buyers had to report on performance, and no relevant cost data was furnished. The later approved price list showing Rs. 4,820 per unit was therefore used to determine the assessable value for the earlier clearances, and the valuation adopted on that basis was upheld.

---

---

Issues: Whether the value of motorcycles cleared to employees prior to 9-2-1982 could be adopted as the normal price for excise valuation, and whether such employees were related persons.

Analysis: The sales to employees were not treated as sales to related persons, since there was no mutuality of interest in the business of each other. However, the price of Rs. 3510 per unit could not be regarded as the normal price because the motorcycles were being sold at a lower value during an experimental stage, the buyers were required to report back on performance, and no cost data was furnished for the relevant period. In these circumstances, the higher price of Rs. 4820 shown in the later approved price list was accepted for determining the assessable value of the earlier clearances.

Conclusion: The adoption of Rs. 4820 as the assessable value for the earlier period was upheld and the appeal failed.

Ratio Decidendi: Where the declared sale price does not reflect the ordinary wholesale price and the assessee fails to furnish relevant cost data, the later approved price list may be relied upon for excise valuation.

---