Customer-specific inspection charges excluded from excise assessable value where goods were already certified and wholesale price was unchanged.

Inspection and testing charges incurred only at a specific customer's request and reimbursed by that customer were held outside assessable value under the central excise valuation scheme. The goods had already been manufactured, quality-checked and certified under applicable standards before the additional DGS & D inspection, which was optional and not a normal feature of sales to other wholesale buyers. As the assessee received no amount beyond the ordinary wholesale price and the expense was customer-specific rather than a post-manufacturing cost connected with making the goods marketable in ordinary wholesale trade, the charges were not includible in assessable value.

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Issues: Whether inspection and testing charges incurred at the instance of a specific customer and reimbursed by that customer are includible in the assessable value of the excisable goods.

Analysis: The goods were already manufactured, quality-checked by the assessee, and certified under the applicable standards before the disputed DGS & D inspection. The additional inspection was undertaken only at the request of the purchasing department, was optional, and was not a normal feature of sales to other wholesale buyers. The assessee did not derive any extra amount over and above the ordinary wholesale price, and the disputed charges were borne by the customer. On the scheme of Section 4 of the Central Excises and Salt Act, 1944, assessable value is based on the price ordinarily realised at the time and place of removal, not on customer-specific post-manufacturing expenses unconnected with making the goods marketable in the ordinary wholesale trade.

Conclusion: The customer-specific inspection and testing charges were not includible in the assessable value and the assessee succeeded on this issue.

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