Assessable value for gas cylinders must exclude separately identifiable rental and service charges before duty is determined.

Rental and service charges collected separately for gas cylinders were examined for inclusion in assessable value for exemption and duty demand. The authorities treated debit-note collections as part of the gas price, but the adjudicating authority failed to determine whether any amount was genuinely referable to rental or service charges. The record required segregation of the charge element and exclusion of the portion not forming part of assessable value. Because that exercise was not done, the demand determination was found unsatisfactory, the order was set aside, and the matter was remanded for fresh adjudication after personal hearing.

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Issues: Whether rental charges and service charges collected separately for gas cylinders were includible in the assessable value for the purpose of exemption and duty demand.

Analysis: The record showed that the authorities had proceeded on the basis that the amounts collected under debit notes formed part of the price of the gas, but the adjudicating authority had not properly examined whether any part of those collections was genuinely referable to rental charges or service charges. Even on the assumption that the charges were higher than justified, the authority was required to segregate the element attributable to such charges and exclude that portion from the assessable value. As this exercise had not been undertaken, the determination was found to be unsatisfactory and fresh adjudication was warranted.

Conclusion: The demand order was set aside and the matter was remanded for fresh decision after granting an opportunity of personal hearing.

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