Separate buyer classes prevent factory-gate pricing from governing duty valuation on depot sales.

Where wholesale buyers at the factory gate and wholesale buyers through depots constitute separate classes, the factory-gate price cannot be treated as the normal price for assessing duty on depot sales. The Tribunal applied a binding Larger Bench principle and held that goods cleared through out-of-State depots could not be assessed on the higher ex-factory price. On that basis, the duty demand was unsustainable, the impugned orders were set aside, and the assessee's appeal succeeded.

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Issues: Whether duty on goods cleared through depots outside the State was assessable on the higher factory-gate price when wholesale buyers at the factory gate and wholesale buyers from depots constituted different classes of buyers.

Analysis: The assessee sold the same goods at different prices to buyers within Gujarat at the factory gate and to buyers outside the State through depots. The Tribunal noted that a Larger Bench had already held that wholesale buyers at the factory gate and wholesale buyers from depots form separate classes of buyers, and that in such cases the ex-factory price cannot be treated as the normal price for goods sold through depots. On that binding principle, the price charged at the factory gate was not the correct basis for assessing duty on depot sales.

Conclusion: The duty demand based on the factory-gate price was not sustainable and the assessee succeeded.

Final Conclusion: The impugned orders were set aside and the assessee's appeal was allowed on the ground that depot sales could not be assessed on the factory-gate price where different classes of buyers were involved.

Ratio Decidendi: Where wholesale buyers at the factory gate and wholesale buyers through depots constitute separate classes, the factory-gate price cannot be treated as the normal price for assessing duty on depot sales.

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