Assessable value of goods excludes buyer's post-clearance compression charges where no nexus with manufacture or marketability is shown.

Licence fee and service charges collected from the buyer for use of part of the factory premises, and for electricity and water used to compress oxygen gas after delivery, were held not includible in the assessable value of uncompressed oxygen gas. The charges related only to the buyer's post-clearance compression activity in the seller's premises and had no nexus with manufacture or clearance of the gas sold by the manufacturer. As the record did not show any disguised compression activity by the seller, and the charges did not enhance the value or marketability of the product, they could not be added to assessable value.

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Issues: Whether licence fee and service charges collected by the manufacturer from the buyer for use of part of the factory premises and for electricity and water supplied for compressing oxygen gas were includible in the assessable value of the uncompressed oxygen gas.

Analysis: The charges in question were found to relate only to the buyer's activity of compressing the gas after delivery in the appellant's premises. They had no nexus with the manufacture or clearance of the uncompressed oxygen gas sold by the appellant. The record also did not show that the compression was being carried out by the appellant in the guise of the buyer. Since the licence fee and service charges did not enhance the value or marketability of the appellant's product, they were not liable to be added to the assessable value.

Conclusion: Licence fee and service charges were not includible in the assessable value; the issue was decided in favour of the assessee.

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