Excise valuation must follow the ex-factory price of bulk goods; depot price of packed oil cannot be substituted.

Where bulk lubricating oil had a normal ex-factory price from sales to independent buyers, excise valuation for clearances to a job worker had to be based on that price, not on the depot price of packed oil sold in tins. The depot price of a different product form could not be substituted because bulk oil and containerised oil were not the same goods for valuation purposes, and the phrase "such goods" could not be stretched beyond its ordinary scope. Packing or repacking of bulk oil was also held not to constitute manufacture absent a specific deeming provision. The department's valuation method was therefore rejected.

---

---

Issues: Whether the assessable value of bulk lubricating oil cleared to a job worker for repacking could be fixed by taking the depot price of packed oil, and whether packing or repacking of bulk oil amounted to manufacture for excise purposes.

Analysis: The bulk oil was separately sold to independent buyers at the factory gate, so a normal price for the bulk goods was available. Once such ex-factory price exists, it is the relevant basis for valuation of other removals of the same bulk goods. The amended concept of place of removal could not justify adopting the depot price of a different product form, because bulk oil cleared from the factory and oil sold in tins from depots were not the same goods for valuation purposes. The expression "such goods" could not be stretched to treat bulk oil as identical to containerised oil, and the depot price of packed goods could not be imported to the bulk clearances. Packing or repacking of bulk lubricating oil was also held not to amount to manufacture in the absence of a specific statutory deeming provision.

Conclusion: The duty demand based on depot price was unsustainable, and the valuation adopted by the department was rejected in favour of the assessee.

Ratio Decidendi: Where the ex-factory normal price of bulk goods is available, excise valuation must be based on that price, and the price of a different form of the goods sold from depots cannot be applied unless the statute clearly permits such substitution.

---