Factory gate price genuineness in excise valuation defeated reliance on depot prices absent contrary evidence.

Excise valuation turned on whether the appellant's factory gate prices were genuine or whether depot prices should be used instead. The Tribunal applied an earlier decision on similar facts and sale pattern, holding that a larger volume of depot sales did not by itself make factory gate prices non-genuine. In the absence of additional evidence showing that the factory gate sales were not real, the same reasoning applied and depot prices could not be adopted for valuation. The demand and penalty were therefore set aside in favour of the assessee.

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Issues: Whether the factory gate prices of the appellant's goods were genuine and, consequently, whether valuation could be based on depot prices instead of the factory gate prices.

Analysis: The dispute concerned excise valuation of goods sold mainly through depots, while a smaller portion was sold at the factory gate. The Tribunal noted that the appellant had generally agreed to pay any differential duty after deduction of permissible expenses, but had still contested the genuineness of the factory gate prices. The issue had already been considered in an earlier Tribunal decision on similar facts and sale pattern, where the factory gate prices were held to be genuine and not liable to be treated as non-genuine merely because a larger volume of sales occurred through depots. In the absence of any additional evidence showing that the factory gate sales were not genuine, the same reasoning was held applicable.

Conclusion: The factory gate prices were held to be genuine, the depot prices could not be adopted for valuation on the facts of the case, and the demand and penalty were set aside in favour of the assessee.

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