Assessable value under excise includes separately recovered die research and development charges tied to manufacture.

Charges recovered separately from customers toward die research, development, and related tooling are includible in the assessable value of the final product for central excise. The text states that such expenditure forms part of the intrinsic value of the excisable goods because dies, moulds, research, development, and technological inputs used in manufacture contribute to production value, whether recovered through debit notes or reflected in invoices. Separate recovery or claimed amortisation does not justify exclusion where the charges are linked to manufacture and were not properly disclosed. On that reasoning, the duty demand was treated as sustainable and the exclusion claim was rejected.

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Issues: Whether die research and development charges recovered separately by issuing debit notes were includible in the assessable value of the final product for levy of central excise duty.

Analysis: The respondents admitted that during the relevant period they recovered die research and development charges from customers by issuing debit notes and, in some cases, by showing the charges in invoices. The Commissioner (Appeals) had proceeded on a presumption that the cost of development of tools and dies would stand absorbed by amortisation in the assessable value, but that approach ignored the specific admission and the absence of disclosure to the department. The settled position is that the value contributed by dies, moulds, research, development, and technological inputs used in manufacture forms part of the intrinsic value of the final product and must be taken into account for excise assessment.

Conclusion: The charges were includible in the assessable value and the duty demand was sustainable; the assessee's challenge failed.

Final Conclusion: The appellate order was unsustainable, and the adjudicating authority's demand was restored with consequential relief.

Ratio Decidendi: Charges recovered from customers towards dies, research, and development that contribute to manufacture form part of the assessable value of the excisable final product and cannot be excluded merely because they are recovered separately or are said to be amortised.

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