Assessable value on inter-unit clearance depends on the price at removal, not a later internal invoice.

Where excisable goods are cleared from one separately registered unit to another unit of the same company, the clearance is not treated as a mere internal transfer if duty is paid on removal and no permission exists for removal without duty under the Central Excise Rules, 1944. A later invoice showing a reduced price does not alter the assessable value where it appears to be an afterthought to support a refund claim. The correct assessable value is the prevailing price at the time and place of removal, and a subsequent internal document cannot convert the transaction into a non-sale for excise purposes.

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Issues: Whether molasses cleared from the sugar factory to the distillery unit of the same company were merely transferred to another registered premises or were removed in the course of sale, and whether the assessable value for central excise duty had to be taken at the prevailing price on removal.

Analysis: The Sugar Factory and the Distillery Unit held separate central excise registrations and the molasses were removed from the licensed premises on payment of duty under multiple invoices. No permission had been obtained under Rule 47(5) of the Central Excise Rules, 1944 for removal without duty. On these facts, the removal could not be treated as a mere transfer of stock to another premises. The later invoice showing a reduced price was treated as an afterthought intended to support a refund claim. The proper assessable value was therefore the prevailing price at the time and place of removal, not a price fixed subsequently.

Conclusion: The clearance was held to be a sale transaction and the duty was correctly paid on the assessable value of Rs. 140 per quintal. The refund claim was not sustainable and the Revenue succeeded.

Final Conclusion: The appellate order allowing refund was set aside and the Revenue's challenge to the refund claim was upheld.

Ratio Decidendi: Where excisable goods are removed from one separately registered unit on payment of duty, the assessable value is the price prevailing at the time and place of removal, and a subsequent internal transfer document cannot convert the clearance into a non-sale for refund purposes.

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