Buyer-supplied moulds as additional consideration included in assessable value, but demand failed for lack of suppression.

Buyer-supplied moulds essential to manufacture were treated as additional consideration where the finished-goods price reflected that supply, so the proportionate money value of the moulds was includible in the assessable value of the plastic components. However, the demand failed on limitation because the assessee had filed classification and price lists and disclosed the relevant contractual particulars, leaving no suppression or concealment to justify the extended period. The valuation principle was therefore applied against the assessee, but the assessment and demand could not be sustained because the claim was time-barred.

---

---

Issues: (i) Whether the proportionate cost or money value of moulds supplied free of charge by the buyer was includible in the assessable value of the plastic components manufactured by the assessee. (ii) Whether the demand could be sustained by invoking the extended period of limitation in the absence of suppression or concealment.

Issue (i): Whether the proportionate cost or money value of moulds supplied free of charge by the buyer was includible in the assessable value of the plastic components manufactured by the assessee.

Analysis: The applicable valuation scheme required the normal price to be taken only where price was the sole consideration, and where additional consideration flowed directly or indirectly from the buyer, its money value had to be added. The moulds were essential for manufacture, were supplied by the customer, and had substantial value; the agreed price of the finished goods was fixed taking that supply into account. The Tribunal held that the use of the mould constituted additional consideration and that its proportionate value had to be included in the assessable value.

Conclusion: The mould cost was includible in the assessable value, against the assessee.

Issue (ii): Whether the demand could be sustained by invoking the extended period of limitation in the absence of suppression or concealment.

Analysis: The assessee had filed classification and price lists and had placed the relevant contractual particulars before the Department. On those facts, the Department could not claim that the omission was discovered only later so as to justify extended limitation. As there was no suppression of material facts, the extended period was unavailable and the demand was time-barred.

Conclusion: The demand was barred by limitation, in favour of the assessee.

Final Conclusion: Although the valuation principle was decided against the assessee, the assessment and demand failed on limitation, and the impugned order was set aside.

Ratio Decidendi: Where buyer-supplied moulds are essential to manufacture and their supply is part of the price arrangement, their proportionate money value forms additional consideration for valuation; but the extended period cannot be invoked when the relevant facts were disclosed to the Department.

---