Assessable value for excise duty excludes interest on customer advances where no link to price reduction is shown.

Interest attributable to customer advances was not includible in assessable value for excise duty because the department failed to show that the advances depressed the sale price. The notices alleged receipt of advances, but the record showed they were taken only in some transactions, for varying percentages and limited periods, with no evidence of any trade practice, competitor comparison, or nexus between the advances and a lower wholesale price. The demand for differential duty therefore could not be sustained.

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Issues: Whether the interest element relatable to advances received from customers was includible in the assessable value for excise duty.

Analysis: The show cause notices only alleged receipt of advances by the assessee and did not establish that such advances had depressed the prices charged to buyers. The materials showed that advances were taken only in some transactions, often in varying percentages and for limited periods, and there was no evidence of any trade practice requiring such advances or any comparison with competitors' prices. On the facts, no nexus was shown between the advances and any reduction in the wholesale price.

Conclusion: The interest on advances was not includible in the assessable value, and the demand of differential duty could not be sustained.

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