Assessable value of goods cannot be increased by a service charge absent proof of actual recovery or valuation inclusion.

Where no 2% service charge was recovered on electrodes captively consumed or used by the distributor for its own manufacture, and the purchasers fell into different classes under the valuation scheme, the amount could not be added to assessable value without material showing that it was actually included in valuation. The Tribunal rejected the Revenue's challenge and upheld the Commissioner (Appeals) by holding that a general allegation of comparable pricing was insufficient to justify inclusion of the disputed charge.

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Issues: Whether 2% service charges recovered by the sole distributor were liable to be added to the assessable value of electrodes cleared for captive consumption and supplies to the distributor.

Analysis: The Tribunal noted that no 2% charge was recovered on the electrodes captively consumed by the assessee or by the distributor for its own manufacture. It further held that the buyers of electrodes used captively and the buyers in the distributor channel formed different classes of purchasers, with the possibility of different prices under the valuation scheme. In the absence of any charge collection or other material showing inclusion of the disputed amount in valuation, the Revenue had no basis to seek addition of the 2% service charge.

Conclusion: The 2% service charge was not includible in the assessable value and the Revenue's appeal failed.

Final Conclusion: The order of the Commissioner (Appeals) was upheld and the departmental challenge to the valuation was rejected.

Ratio Decidendi: Where no disputed amount is recovered in the relevant clearances and the purchasers fall into different classes under the valuation rules, such amount cannot be added to the assessable value merely on a general allegation of comparable pricing.

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