Notional interest on buyer advances is includible only when evidence shows the advance depressed the goods' price.

Notional interest on buyer advances was treated as includible in assessable value only where the Department could prove, with evidence, a real nexus between the advance and any depression in the price of the goods. A mere assumption that the buyer would otherwise have borrowed commercially was held insufficient to establish that nexus. On the material before it, the appellate finding that no such price effect was shown was left undisturbed, and the Revenue's challenge failed. The stated ratio is that notional interest on advance price becomes part of assessable value only when the advance is shown to have actually reduced the sale price.

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Issues: Whether notional interest on advance price received from buyers was includible in the assessable value of the machinery manufactured by the assessee.

Analysis: The demand rested only on the premise that, if advances had not been taken, the buyers would have borrowed commercially. That circumstance, by itself, was held insufficient to establish the required nexus showing that the advances depressed the price of the goods. The Department was required to support the demand with evidence that the advances actually resulted in a fall in price, and the material on record did not justify interference with the appellate finding.

Conclusion: Notional interest on the advance price was not includible in the assessable value, and the Revenue's challenge failed.

Final Conclusion: The appeal was dismissed, leaving the assessee's valuation treatment undisturbed.

Ratio Decidendi: Notional interest on buyer advances is includible in assessable value only when the Department establishes, on evidence, a real nexus between the advance and depression of price.

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