Assessable value under excise valuation excludes consideration paid by a raw material supplier, not the buyer.

Additional consideration is includible in assessable value under Rule 5 of the Central Excise Valuation Rules only when it flows directly or indirectly from the buyer to the assessee in sales covered by section 4(1)(a) of the Central Excise Act. The Tribunal held that who fixed the price was immaterial, but a payment made by the supplier of raw materials was not such buyer-derived consideration and therefore could not be added to assessable value. The impugned order was set aside and the assessee's appeals were allowed with consequential relief.

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Issues: Whether additional consideration received from the supplier of raw materials could be added in determining the assessable value under Rule 5 of the Central Excise Valuation Rules.

Analysis: The relevant valuation rule permits inclusion only of additional consideration flowing directly or indirectly from the buyer to the assessee where the goods are sold in the circumstances contemplated by section 4(1)(a) of the Central Excise Act. The fact as to who fixed the price was held to be immaterial. Following the earlier Tribunal view that the rule must be applied according to its plain language, additional consideration paid by the supplier of raw materials was held not to be includible in the assessable value.

Conclusion: The impugned order was set aside and the assessee's appeals were allowed with consequential relief.

Final Conclusion: Additional consideration from a raw material supplier was held not to form part of the assessable value for central excise valuation purposes.

Ratio Decidendi: For valuation under Rule 5, only additional consideration flowing from the buyer to the assessee is includible in assessable value; payments by a third-party supplier are not.

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