Outside-agency inspection cost is includible in assessable value only when inspection is actually carried out.

Outside-agency inspection cost for industrial valves is includible in assessable value only when the inspection is actually carried out; where no inspection takes place, no addition is permissible. The challenge to the departmental approach failed because the claim that most valves had in fact undergone outside inspection was unsupported by evidence, and the distinction drawn between inspected and uninspected batches was not shown to be erroneous. Whether a particular batch was inspected was treated as a factual determination by the departmental authority.

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Issues: Whether the cost of outside-agency inspection of industrial valves was liable to be added to the assessable value in cases where such inspection was actually conducted, and whether any addition could be made where no such inspection was undertaken.

Analysis: The appeal was unsupported by evidence on the claim that most valves were in fact subjected to outside inspection under contractual or safety requirements. The challenged order had drawn a distinction between cases where inspection was conducted and cases where it was not, and that basic approach was not shown to be erroneous. The question whether a particular batch of valves was inspected was treated as a matter of factual determination by the departmental authority.

Conclusion: The cost of outside-agency inspection was to be added to the assessable value only where such inspection was actually carried out, and no addition was permissible where no inspection took place. The appeal failed and was dismissed.

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