Tooling advance and mould cost held includible in assessable value of finished automobile seats; wrong statutory citation did not defeat the demand.

Tooling advance received from the buyer was treated as consideration linked to the supply of finished automobile seats, so it remained includible in the assessable value even though it was used through vendors to develop tools and moulds. The amortised cost of those tools and moulds was also includible because the buyer-funded development reduced the manufacturer's cost and enhanced the value of the finished seats. A wrong statutory reference in the show cause notice did not invalidate the demand where the levy was otherwise traceable to the correct valuation framework. The demand, interest and penalty were sustained.

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Issues: Whether the tooling advance received from the buyer and the amortised cost of tools and moulds developed through vendors were includible in the assessable value of the finished automobile seats cleared by the manufacturer.

Analysis: The amount received as tooling advance was held to be consideration connected with the supply of the finished goods, and its utilisation for developing tools and moulds through vendors did not change its character for valuation purposes. The reasoning proceeded on the basis that the buyer had contracted for the finished products, the advance reduced the manufacturer's cost in relation to those products, and the value of the components and tools funded by the advance ultimately enhanced the value of the seats. The objection that the show cause notice had cited a wrong valuation provision was rejected because a wrong statutory reference does not invalidate proceedings when the demand is otherwise traceable to the proper charging and valuation framework.

Conclusion: The tooling advance and the related amortised cost were correctly includible in the assessable value of the finished seats, and the demand, interest, and penalty were sustained against the assessee.

Ratio Decidendi: Amounts received in money as consideration for the supply of finished goods are includible in transaction value, and a wrong provision cited in the show cause notice does not vitiate proceedings if the demand is otherwise legally sustainable.

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