Factory gate price governs depot sales before the 1996 excise amendment, subject to proof of actual factory gate sales.

For the period before the 1996 amendment to Section 4 of the Central Excise Act, depot sales were to be assessed on the factory gate price where such price was available, because the depot was not yet treated as a place of removal under the amended provision. The later amendment applied only from 28-9-1996 and could not govern the earlier period. The matter was remitted only to verify whether factory gate sales in fact existed, and if so, that price was the proper assessable value for the depot clearances.

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Issues: Whether, for the period prior to the 1996 amendment to Section 4 of the Central Excise Act, 1944, the assessable value for goods sold through depots had to be based on the factory gate price where such price was available.

Analysis: The amendment introducing depot as a place of removal came into force only from 28-9-1996 under Section 74 of the Finance (No. 2) Act, 1996, whereas the dispute related to an earlier period. For the pre-amendment period, the applicable principle was that where factory gate sale price was available, that price formed the proper basis for assessment even for sales routed through depots. The matter was sent back only to verify the factual availability of such factory gate sales.

Conclusion: The factory gate sale price, if available, is the proper assessable value for depot sales for the period in question, and the contrary view based on the amended provision does not apply.

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