Post-sale bonus and penalty payments for product performance were excluded from excise assessable value as post-clearance adjustments.

Bonus and penalty amounts arising under post-sale commercial terms for the performance of refractory bricks were held to be outside the assessable value for excise duty because they accrued only after clearance of the goods and depended on whether the goods met or failed guaranteed performance parameters in the buyers' agreement. Applying the earlier decision relied upon, such payments were treated as post-sale adjustments rather than part of the price at the time of removal. The excise demand therefore could not survive.

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Issues: Whether bonus and penalty amounts received or payable under post-sale commercial terms for performance of refractory bricks are includible in the assessable value for excise duty.

Analysis: The amounts arose only after clearance of the goods and were linked to whether the refractory bricks outperformed or failed the guaranteed performance parameters under the buyers' agreement. Following the earlier decision relied upon, such bonus or penalty payments were treated as post-sale payments and not part of the assessable value.

Conclusion: The bonus and penalty amounts were not includible in the assessable value, and the demand could not survive.

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