Assessable value of gases excludes returnable cylinder rental charges treated as an ancillary supply facility.

Rental charges collected for returnable cylinders used in supplying gases were held not includible in the assessable value, because the charge related to an ancillary facility and not to the manufacturing price of the gases. Charges for cylinders, crates or other returnable containers used in clearance or supply do not form part of assessable value where the container activity is separate from manufacture and functions only as an allied service. The demand based on inclusion of cylinder rental charges could not be sustained, and the order confirming such inclusion was set aside.

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Issues: Whether the rental charges collected for cylinders used for supplying gases were includible in the assessable value of the gases.

Analysis: The rental charges on cylinders were treated as consideration for an ancillary facility connected with supply of gases, not as part of the manufacturing price of the gases. The reasoning followed settled precedent that charges for cylinders, crates or containers used in supply, including charges linked to delayed return, do not form part of the assessable value where the activity is separate from manufacture and functions only as an allied or ancillary venture.

Conclusion: The rental charges for cylinders were not includible in the assessable value of the gases, and the demand based on such inclusion could not be sustained.

Final Conclusion: The appeal succeeded and the order confirming inclusion of cylinder rental charges in the assessable value was set aside.

Ratio Decidendi: Charges received for the supply or hire of returnable containers used in the clearance of goods are not part of the assessable value when they relate to an ancillary facility and not to the manufacture or sale price of the goods.

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