Optional re-inspection charges outside normal sale price are excluded from excise assessable value on electric motors

Re-inspection charges collected only when customers requested a second inspection, and not as part of the ordinary sale process, were outside the normal price adopted for excise valuation. Because the record showed that re-inspection was optional, infrequent, and undertaken only in a small number of cases, the extra amount could not be treated as a component of assessable value for excise duty on electric motors. The departmental challenge therefore failed, and the charges were held not includible in assessable value.

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Issues: Whether re-inspection charges collected only on request of customers and not in the ordinary course of sale were includible in the assessable value for levy of excise duty on electric motors.

Analysis: The relevant valuation provision requires adoption of the normal price, namely the price at which goods are ordinarily sold. The record showed that re-inspection was not compulsory and was undertaken only in a small number of cases at the instance of customers, while the great majority of sales took place without such second or special inspection. In these circumstances, the extra charge could not be treated as part of the ordinary sale price or as a component of assessable value.

Conclusion: The re-inspection charges were not includible in the assessable value and the departmental appeal failed.

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