Assessable value deduction for refundable advance interest upheld where no interest liability had actually accrued.

An advance interest component included in the declared price for a credit period is deductible from assessable value where it is refundable by credit note if payment is made against delivery or before the interest actually accrues. The amount was treated as a contingent recovery for delayed payment, not a non-refundable part of the sale price, so the lower authorities were not justified in rejecting the deduction outright. The price lists should have been approved with the stated qualification, and the deduction was available only to the extent no liability to pay interest had actually arisen during the relevant period.

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Issues: Whether the interest element included in the declared price for the first 20 days of credit was deductible from assessable value where the amount was refundable by credit note if payment was made against delivery or before interest actually accrued.

Analysis: The price structure showed that the declared price included a component described as interest for the credit period, but the manufacturer was bound to refund that component by credit note wherever payment was made against delivery or before the full credit period expired. The collection of the amount was only an advance recovery to meet the contingency of delayed payment and not a non-refundable part of the sale price. The lower authorities were therefore not justified in rejecting the deduction outright, and the price lists should have been approved with the stated qualification.

Conclusion: The interest element was deductible to the extent no liability to pay such interest actually arose within the relevant period, and the assessee succeeded on this issue.

Ratio Decidendi: An amount collected as advance interest, which is refundable by credit note when no delayed payment occurs, is not part of the assessable price to the extent it does not represent an accrued liability for interest.

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