Buyer-specific special testing costs outside the factory are excluded from excisable assessable value when borne by the buyer.

Charges for special testing conducted outside the factory at the buyer's instance and at the buyer's cost did not form part of the assessable value for central excise duty. The manufacturer's routine in-factory testing was distinguishable from the additional buyer-specific testing, and the Tribunal followed its earlier decisions applying the same valuation principle. On those facts, the departmental view on inclusion in assessable value was rejected and the assessee succeeded.

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Issues: Whether the cost of special testing arranged outside the factory at the instance of buyers was includible in the assessable value for central excise duty.

Analysis: The manufacturer carried out routine testing in the factory, while special testing outside the factory was undertaken only at the buyers' instance and the cost was borne by the buyers. On these facts, the cost of such special testing was held not to form part of the assessable value. The Tribunal's earlier decisions on the same principle were followed.

Conclusion: The cost of special testing was not includible in the assessable value, and the appeal was rejected.

Final Conclusion: The departmental view on valuation was not accepted, and the assessee succeeded.

Ratio Decidendi: Charges for special testing conducted outside the factory at the buyer's instance and at the buyer's cost do not form part of the assessable value for excise purposes.

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