Refundable security deposit for dealer installation was excluded from assessable value because it was not sale consideration.

A refundable security deposit collected from dealers to secure proper installation of IC engines was not part of the price or consideration for sale. Because the deposit was returnable on production of the required certificate and was not an amount payable by the buyer as part of the transaction value, it could not be included in the assessable value for excise purposes. The issue was decided in favour of the assessee.

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Issues: Whether the refundable security deposit of Rs. 300 per engine collected from dealers at the time of sale was includible in the assessable value of the IC engines as part of the transaction value.

Analysis: The deposit was taken only to secure proper installation by the dealer and was returned on production of the required certificate. It was not an amount payable by the buyer to the seller as part of the price of the goods. A refundable deposit of this nature does not represent consideration for the sale and cannot be treated as part of the value for excise purposes.

Conclusion: The refundable security deposit was not includible in the assessable value and the issue was decided in favour of the assessee.

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