Different buyer classes need separate excise valuation; a contract price for one buyer cannot govern sales to others.

Where goods are sold to different classes of buyers at different prices, assessable value under excise law cannot be determined by applying a contract price meant for one distinct buyer to other sales. The note explains that ex-factory sales to Indian Railways were contract sales to a specific class of buyer, so that price could not govern valuation of sales to other buyers. Section 4 permits valuation based on different prices for different classes of buyers, and the lower authorities had not addressed this submission. The stated result was that the demand was unsustainable and the assessment basis was quashed in favour of the assessee.

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Issues: Whether, for valuation of goods cleared to consignment agents and sold from their premises, the ex-factory contract price charged to a specific buyer could be adopted for assessing sales to other buyers.

Analysis: The appellant had contended that the ex-factory sales were contract sales to a particular customer and that such contract price could not govern assessment of sales to other parties. The lower authorities had not dealt with this submission. Section 4 of the Central Excise law permits assessment on the basis of different prices applicable to different classes of buyers. Since sales to Indian Railways were contract sales to a distinct class of buyer, that price could not be used as the assessable value for sales to other parties.

Conclusion: The contract price to the specific buyer could not be adopted for assessment of other sales; the demand was unsustainable and was quashed in favour of the assessee.

Ratio Decidendi: Where goods are sold to different classes of buyers at different prices, the assessable value cannot be fixed by applying a contract price meant for one class of buyer to sales made to another class.

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