Trade discount valuation principle: assessable value turns on the discount actually allowed, not the method of computation.

Trade discount allowed in accordance with normal wholesale practice is excluded from assessable value, and the decisive factor is the discount actually allowed by the assessee rather than the precise arithmetical method used to compute it. The dispute over the unit quantity discount calculation was therefore treated as irrelevant to valuation. On that basis, the duty demand raised on an alternative computation method was not sustainable and was set aside in favour of the assessee.

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Issues: Whether the quantity discount was to be computed in the manner adopted by the assessee for determining assessable value, and whether the duty demand based on a different method of computation was sustainable.

Analysis: The relevant provision excludes from value the trade discount allowed in accordance with the normal practice of the wholesale trade at the time of removal. The decisive factor is the discount as allowed by the assessee, and the correctness of the particular method of computation is not material for this purpose. The controversy over the precise arithmetical method of arriving at unit quantity discount was therefore treated as irrelevant to assessable value.

Conclusion: The duty demand based on the alternative method of computing quantity discount was not sustainable and was set aside in favour of the assessee.

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