Excise valuation excludes separate machine hire and maintenance charges where the dispensing equipment is independent of the goods sold.

Machine hire charges and repair and maintenance charges for a dispensing machine were treated as separate from the sale of the goods under central excise valuation principles. The Tribunal held that only amounts charged by reason of, or in connection with, the sale of the goods under assessment can be included in assessable value. Since leasing or hiring the PMX machine was an independent activity distinct from the sale of syrup or Bag-in-Box goods, the rental and maintenance charges were not includible in assessable value. The assessee was therefore entitled to deduct those charges.

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Issues: Whether machine hire charges and repair and maintenance charges of the PMX machine were deductible from the assessable value of the goods for central excise purposes.

Analysis: The liability turned on whether the charges connected with the PMX machine formed part of the price of the goods under assessment. The Tribunal held that leasing or hiring of the dispensing machine was a separate activity from the sale of syrup or Bag-in-Box goods, and that only amounts charged by reason of or in connection with the sale of the goods under assessment could be included in the assessable value. Following binding precedent, the Tribunal concluded that rental and maintenance charges relating to the machine were not includible in the assessable value.

Conclusion: The assessee was entitled to deduction of the machine hire charges and repair and maintenance charges from the assessable value.

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