Contractual price variation in excise valuation may be valid where separate buyers and supply quantities justify different assessable values.

Different contractual prices for the same goods may be accepted for excise valuation where the buyers are distinct Central Excise entities and the price variation is explained by the terms and quantum of supply. The record showed that the purchasers were separate entities at different locations, and the differential pricing reflected contractual arrangements rather than an unsupported valuation distinction. The earlier authorities had not properly examined this factual justification and sustained the demand on an incomplete appreciation of the material. The differential duty demand was therefore held unsustainable, the assessee's position was accepted, and the impugned order was set aside with consequential relief.

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Issues: Whether two different contractual prices charged for the same goods to two separate buyer entities could be accepted for assessment and whether differential duty was sustainable.

Analysis: The buyers were distinct Central Excise entities situated at different locations. The pricing difference was linked to the quantum of supply under the respective contracts, and the purchasers were treated as separate classes of buyers. The earlier authorities did not properly examine this justification and instead sustained the demand on an incomplete appreciation of the facts. The cited precedent recognised that more than one assessable value can exist even for the same class of buyers, and that different prices based on contractual terms and quantity variations may be permissible.

Conclusion: The differential duty demand was not sustainable, and the assessee's position was accepted.

Final Conclusion: The appeals succeeded and the impugned order was set aside, with consequential relief as admissible.

Ratio Decidendi: Different contractual prices for the same goods may be accepted where the buyers are distinct entities and the variation is explained by the terms and quantum of supply.

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