Deferred sales tax paid at net present value is not additional consideration for central excise valuation.

Premature discharge of deferred sales tax at net present value under a State incentive scheme was not additional consideration for central excise valuation because the valuation rule excludes sales tax actually paid or actually payable from transaction value. The difference between the deferred liability and the discounted payment reflected only the time value of money, and no part of the tax collected from buyers was retained as consideration for the goods. A precedent involving retention of a portion of sales tax was distinguished on that basis. The amount was therefore not includible in the assessable value, and the demand could not be sustained.

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Issues: Whether the amount of deferred sales tax paid prematurely at net present value under the State incentive scheme was includible in the assessable value as additional consideration under the central excise valuation provisions.

Analysis: The valuation rule excludes sales tax actually paid or actually payable from transaction value. The scheme in question did not involve retention of any part of the tax collected from buyers; it only permitted early discharge of the deferred sales tax liability at its discounted present value. The difference between the deferred liability and the amount paid arose from timing and the time value of money, not from any amount retained by the assessee as consideration for the goods. The precedent relied on by the department was distinguished because it concerned retention of a portion of sales tax collected, whereas here the entire liability was discharged prematurely.

Conclusion: The premature payment of deferred sales tax at net present value was not additional consideration and could not be added to the assessable value. The demand was not sustainable.

Final Conclusion: The valuation dispute was resolved in favour of the assessee, and the impugned demand confirmation could not be sustained.

Ratio Decidendi: Where deferred sales tax is discharged in full by premature payment at net present value under a governmental scheme, the discount represents only the time value of money and does not form part of the transaction value for central excise purposes.

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