Case condition in where clause

Hi
I'm a SQL beginner but according to my reading of the manual, this syntax should be acceptable. I'm using it in application express but tested it also in SQL developer and finding that it fails with an "invalid relational operator" error, with the line number pointing to the ELSE clause of the CASE condition, but a column number pointing to white space.
This is a nested select but that shouldn't matter. The fragment in question is this:
select some columns
from res
where res.villaid = :P605_VILLAID
and INSTR(:P604_RES_STATES, res.states) != 0
and (CASE :P604_EXCLUDE_ZERO
WHEN 'Y' THEN 'res.rate > 0'
ELSE 'res.rate >= 0'
END)
and res.DEPARTDATE > :P605_STARTDATE
and res.ARRIVEDATE <= :P605_ENDDATE,
I hope this formats ok when posted. The code is looking for reservations in a date range (which works fine when the other conditions are commented out), and should only output zero-rate rows (complimentary nights) if the user asks for this in the P604_EXCLUDE_ZERO bind variable. There are probably other ways to go about this, but I am too stubborn to give up on this. Well, not yet anyway.
Thanks and regards
CS

select some columns
  from res
where res.villaid = :p605_villaid
       and instr (:p604_res_states, res.states) != 0
       and sign (res.rate) >= case when :p604_exclude_zero = 'Y' then 1 else 0 end
       and res.departdate > :p605_startdate
       and res.arrivedate <= :p605_enddate

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    not clear about p_overdue = ALL
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