Notional interest on customer advances excluded from assessable value absent proof of nexus with sale price.

Notional interest on advances received from customers was held not includible in assessable value unless a proven nexus existed between the advance and the sale price. Where advances were taken only in some cases and no link was shown between the advance and any reduction in price, the presumed benefit of interest not actually paid could not be added to valuation. The issue was decided in favour of the assessee.

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Issues: Whether notional interest on advances received from customers was includible in the assessable value of the goods.

Analysis: The inclusion of notional interest depends on a nexus between the advance payment and the price at which the goods are sold. Where advances are received only in some cases and there is no shown connection between the advance and any depression of price, the notional benefit of interest not actually paid on such advances does not form part of the assessable value.

Conclusion: The notional interest on customer advances was not includible in the assessable value, and the issue was decided in favour of the assessee.

Ratio Decidendi: In the absence of a proven nexus between customer advances and the sale price, notional interest on such advances cannot be added to the assessable value.

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