Separate interest for delayed payment excluded from assessable value under central excise law when not part of sale price.

Interest charged separately for delayed payment was not treated as part of the sale price where the invoices showed it was recovered after clearance of goods. On those facts, the amount did not enter the assessable value under Section 4(1)(a) of the Central Excise Act, 1944, because it was not collected as consideration for the goods themselves. The impugned orders were set aside and the appeals were allowed.

---

---

Issues: Whether interest collected from customers on delayed payment formed part of the assessable value for central excise duty purposes.

Analysis: The appellant cleared goods on payment of duty on the selling price under Notification No. 120/75. The invoices disclosed that some customers were charged interest for delayed payment. On the facts found, such interest was not collected as part of the price of the goods. Interest recovered merely for delayed payment does not enter the assessable value under Section 4(1)(a) of the Act.

Conclusion: The interest collected on delayed payment was not liable to central excise duty and did not form part of the assessable value.

Final Conclusion: The impugned orders were set aside and the appeals were allowed.

Ratio Decidendi: Interest charged separately for delayed payment, when not collected as part of the price, is excluded from the assessable value for central excise duty under Section 4(1)(a) of the Central Excise Act, 1944.

---