Notional interest on customer advances is includible in assessable value only when a price nexus is proved; fresh grounds were barred.

Notional interest on customer advances was held includible in assessable value only where a nexus is shown between the advance and the price of the goods; on the record, no such nexus was established, so the valuation demand could not be sustained. A remand on a different ground was also refused because the show cause notices proceeded on a specific valuation basis, and an inquiry into an altogether fresh basis of demand would go beyond the notice. The appeals therefore succeeded, and the demand based on notional interest did not survive.

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Issues: Whether notional interest on advances taken from customers was includible in the assessable value of the goods; whether the matter could be remanded for investigation on a different ground not covered by the show cause notices.

Analysis: Inclusion of interest in assessable value required proof that the advance had an effect on price. No such nexus was shown on the record. The proposed remand was declined because the notices proceeded on a specific valuation basis, and an inquiry on an altogether different ground would amount to introducing a fresh basis of demand beyond the notice.

Conclusion: Notional interest on the advances was not held includible in the assessable value, and remand was refused.

Final Conclusion: The appeals succeeded and the valuation demand based on notional interest did not survive.

Ratio Decidendi: Notional interest on customer advances can be added to assessable value only when a nexus is established between the advance and the price of the goods; in the absence of such nexus, and without a notice covering a different basis, the demand cannot be sustained or remanded on a fresh ground.

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