Domestic sale valuation for diverted export goods required fresh excise assessment, not reliance on the A.R. 4 export value.

Where export goods cleared on bond were diverted for domestic sale, excise duty had to be assessed on the value applicable to the domestic sale under Section 4 and the governing circular, not mechanically on the value declared in the A.R. 4 export document. Because the assessable value was not properly determined after diversion to the home market, the original duty assessment could not be sustained as made. The matter was remitted for fresh assessment and reconsideration of the refund claim in accordance with law.

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Issues: Whether, on diversion of export goods for domestic sale, central excise duty was to be assessed on the value declared in A.R. 4 or on the value ascertained for domestic sale under the governing circular and Section 4.

Analysis: The goods were initially cleared for export on bond but were later permitted to be sold in the domestic market. Duty had been levied on the value declared in A.R. 4, and the refund claim was rejected on that basis. The circular relied upon required the assessable value to be determined in accordance with the value applicable to the domestic sale, and the assessment could not rest mechanically on the export declaration. Since the value for Section 4 purposes had not been properly determined after diversion to the domestic market, the assessment required fresh determination and the refund claim had to be reconsidered on that basis.

Conclusion: The duty assessment could not stand as made on the A.R. 4 value, and the matter was remitted for fresh assessment and reconsideration of the refund claim in accordance with law, in favour of the assessee.

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