Die and development charges are includible in assessable value when recovered as additional consideration linked to the goods sold.

Die and development charges recovered by a manufacturer from buyers were treated as additional consideration with a direct nexus to the excisable goods, and were held includible in assessable value. The reasoning followed the departmental view and Circular No. 170/4/96-CX, which recognises that the apportioned cost of dies, depending on their life, capability and the quantity of castings manufactured, must be added to value. No material was shown to rebut that basis, so the demand and penalty were upheld.

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Issues: Whether die and development charges collected by the manufacturer from buyers formed part of the assessable value of the excisable goods.

Analysis: The manufacturer used its own dies and, for each clearance, recovered separate amounts under the head of die and development charges. The departmental view, accepted by the original authority and the appellate authority, was that these collections constituted additional consideration having a direct nexus with the goods sold. Reliance was placed on Circular No. 170/4/96-CX dated 23-1-1996, which recognised that the apportioned cost of dies, depending on their life, capability, and the quantity of castings manufactured, had to be added to the assessable value. No material was shown to displace that reasoning.

Conclusion: The die and development charges were includible in the assessable value, and the demand and penalty were upheld.

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