Factory gate sale price dispute governs pesticide valuation; depot price alone cannot be applied without fresh factual verification.

Where the existence of a factory gate sale price for bulk pesticides was disputed, valuation could not rest automatically on depot sale price alone; the correct method depended on the proved factual position, including whether the goods were sold in bulk at the factory gate and whether repacking amounted to manufacture. Rule 6(b)(ii) of the Valuation Rules was considered capable of application where excisable goods were used on behalf of the assessee in the production of other articles. Because the record did not conclusively establish the factual basis for choosing the valuation method, the matter was remanded for de novo verification and fresh adjudication.

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Issues: (i) Whether assessable value of pesticides cleared in bulk to repacking units, and later sold in smaller packs, was to be determined on the basis of the depot sale price or on some other valuation basis; (ii) whether the matter required remand for verification of the existence of a factory gate sale price for the bulk goods.

Issue (i): Whether assessable value of pesticides cleared in bulk to repacking units, and later sold in smaller packs, was to be determined on the basis of the depot sale price or on some other valuation basis.

Analysis: The majority held that where the goods were not sold at the factory gate in their bulk form and repacking did not amount to manufacture, the valuation could not automatically be based on depot price without first determining the correct factual position regarding factory gate sales. It was also held that Rule 6(b)(ii) of the Valuation Rules was capable of application where the excisable goods were used on behalf of the assessee in the production of other articles, and that the valuation exercise depended on the proved factual matrix.

Conclusion: The issue was not finally determined on merits and could not be conclusively answered in favour of either side on the existing record.

Issue (ii): Whether the matter required remand for verification of the existence of a factory gate sale price for the bulk goods.

Analysis: The majority found that the record did not conclusively establish whether there was a factory gate sale price for bulk pesticides during the relevant period. Since that factual aspect was material to the choice between the valuation methods urged by the parties, further verification by the original authority was considered necessary before a final assessment could be made.

Conclusion: The matter was required to be remanded for de novo consideration and verification of the factual position.

Final Conclusion: The valuation dispute was sent back for fresh adjudication, and the prior order was set aside so that the factual foundation for assessment could be determined afresh.

Concurring Opinion: The third member agreed with remand, holding that the factual question whether factory gate sale price existed during the relevant period had to be verified first, and if not established, assessment had to proceed under the valuation provisions and rules discussed.

Dissenting Opinion: The judicial member who dissented would have upheld the assessee's challenge and remanded the matter, but for a broader de novo examination on the basis that the bulk-sale and repacking facts had not been properly dealt with.

Ratio Decidendi: Where the existence of a factory gate sale price is disputed and is material to the choice of valuation method, the assessment cannot rest on depot price alone and the factual basis must first be verified in de novo proceedings.

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