Assessable value excludes dealer service discount where no after-sales consideration flows back to the manufacturer.

A 2% service discount given to dealers in lieu of guarantee repair obligations was not to be added to assessable value as additional consideration. The applicable valuation principle is that, unless after-sales monetary consideration is shown to have flowed back from ultimate buyers to the manufacturer, free service or dealer after-sales obligations do not justify enhancement of assessable value. The later line of authority applying this principle was treated as prevailing over the earlier revenue-favouring authority. On that basis, the service discount was held not includible in assessable value and the demand failed.

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Issues: Whether the 2% service discount given to dealers in lieu of guarantee repair obligations was liable to be added to the assessable value as additional consideration.

Analysis: The dispute turned on whether any after-sales monetary consideration flowed back from the ultimate buyers to the manufacturer so as to attract inclusion in assessable value under the excise valuation framework. The Tribunal followed the view that where no such consideration is shown to have flowed back, free service or after-sales obligations undertaken by dealers do not justify enhancement of assessable value. The earlier authority relied on by the revenue was held not to displace the later line of authority applying this principle.

Conclusion: The service discount was not includible in the assessable value and the demand could not be sustained.

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