Excise valuation at removal requires normal factory-gate price when buyer or destination is unknown; special price list cannot apply.

Excise valuation must be fixed at the time of removal on the basis of the normal factory-gate price payable by an ordinary customer. Where the assessee could not identify the purchaser or eventual destination at clearance, an approved Part II price list for a special or contract-linked price could not govern valuation for those removals. The approved list did not override the factual basis required for its application, so duty was properly assessed on the Part I price. The differential duty was therefore sustained, and the penalty remained in force.

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Issues: Whether the approved Part II price list could be ignored and duty levied on the Part I price when the goods were removed without certainty as to the class of buyer or end destination.

Analysis: Duty under the excise valuation scheme is to be determined at the point of removal of the goods. Where, at that stage, the assessee cannot identify the purchaser or the eventual class of buyer, the proper basis is the normal price at the factory gate and not a special or contract-linked price applicable to a particular customer. The approval of a Part II price list does not, by itself, control valuation if the goods are cleared without the necessary factual foundation for that price to apply. The principle applied was that valuation must reflect the price payable by an ordinary customer at the time of removal.

Conclusion: The differential duty based on the Part I price was rightly sustained and the assessee was not entitled to retain the benefit of the Part II price list for these clearances.

Final Conclusion: The revenue's valuation basis was upheld, the assessee's challenge to the duty demand failed, and the penalty was sustained along with the demand.

Ratio Decidendi: For excise valuation, the relevant price is the normal price prevailing at the time of removal, and a special or approved contract price cannot be applied where the buyer or destination is not known at the time of clearance.

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