Commission paid to a selling agent is not deductible from assessable value unless it is a genuine trade discount.

Commission paid to a selling agent was not deductible from the assessable value for central excise valuation where the written arrangement showed 10% to 15% payable on routed sales and the transaction prices were catalogue prices less commission. Independent sales fetched higher prices because no such commission applied, supporting the finding that the amounts were commission rather than genuine trade discount. On that factual basis, the commission could not be excluded from assessable value, and the duty demand was sustained, including for the period governed by Rule 173C(11) of the Central Excise Rules, 1944.

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Issues: Whether commission paid to the selling agent could be deducted from the assessable value for central excise valuation purposes.

Analysis: The written arrangement showed that a commission of 10% to 15% was payable to the selling agent on sales routed through it. The prices charged in such transactions were based on catalogue prices less commission, while independent sales fetched higher prices because no such commission was involved. On this factual basis, the amount passed on to the selling agent was found to be commission and not trade discount. As commission was not a deductible element in arriving at assessable value, the duty demand was held to be sustainable, including for the period governed by Rule 173C(11) of the Central Excise Rules, 1944.

Conclusion: The commission was not deductible from the assessable value and the duty demand was upheld against the appellant.

Final Conclusion: The appeal failed on the valuation issue, and the excise demand sustained by the lower authority remained undisturbed.

Ratio Decidendi: Amounts paid as commission to a selling agent are not deductible from assessable value unless they are shown to be genuine trade discounts forming part of the sale price structure.

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