Assessable value could not be raised by notional service charges absent proof of collection or extra consideration.

Assessable value could not be enhanced by adding 2% service charges for electrodes captively consumed or sold through the sole distributor where no such charge was actually collected, and there was no evidence of any flow back or additional consideration. The material showed separate buyer classes for captive consumption and distributor sales, with prices capable of differing on that basis. In the absence of proof that the alleged service charge formed part of the consideration, the valuation rules did not support any upward adjustment. The assessee's valuation was therefore sustained.

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Issues: Whether 2% service charges could be added to the assessable value of electrodes captively consumed or consumed by the sole distributor, in the absence of any charge being actually collected, flow back, or evidence of additional consideration.

Analysis: The available material showed that no 2% service charge was collected on the electrodes captively consumed by the assessee or by the distributor. The transactions for captive consumption and for sales through the distributor were also between different classes of buyers, and the prices could differ accordingly. In the absence of any demonstrated flow back or recovery of extra consideration, the basis for enhancement of value under the valuation rules was not made out.

Conclusion: The proposed addition of 2% service charges to the assessable value was not justified, and the assessee's valuation was sustained.

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