Design and development charges linked to buyer specifications were held includible in excise assessable value.

Drawing, designing and proportionate design and development charges paid in connection with manufacture of glass jars were held includible in assessable value for central excise purposes because the work was undertaken to meet the buyer's specifications and was integrally connected with manufacture. The buyer had separately agreed to pay these charges in addition to the price of the goods, and the charges were incurred to develop the product to the buyer's requirements. On that basis, they formed part of the assessable value.

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Issues: Whether drawing, designing, and proportionate design and development charges received in relation to manufacture of glass jars were includible in the assessable value for central excise purposes.

Analysis: The appellant manufactured bottles to the design and specification of buyers and undertook design and development work before orders were placed. The record showed that the buyer separately agreed to pay design and development charges in addition to the price of the goods. Since such charges were incurred for developing the product to the buyer's requirements and were integrally connected with the manufacture of the goods, they formed part of the assessable value.

Conclusion: The drawing and designing charges were includible in the assessable value, and the appeal failed.

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