Tooling charges for custom aluminium extrusions form additional consideration and are includible in assessable value.

Tooling charges or part die cost recovered for special-specification aluminium extrusions formed additional consideration flowing from buyers to the manufacturer, so they were includible in assessable value under Section 4(1)(a) of the Central Excise Act and Rule 5 of the Central Excise Valuation Rules. The fact that identical goods were sold to other buyers without such charges, that the dies were separately excisable, or that apportionment was inconvenient did not change the character of the payment as part of the price for the goods. Inclusion in assessable value was upheld.

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Issues: Whether tooling charges or part die cost collected from buyers for manufacture of exclusive aluminium extrusions were includible in the assessable value for central excise purposes.

Analysis: The charge was imposed only in cases where the extrusions were made to special specifications for particular buyers and the dies were required for such manufacture. The amount realised over and above the agreed price was therefore an additional consideration flowing from the buyer to the assessee. Under Section 4(1)(a) of the Central Excise Act, where price is not the sole consideration, and Rule 5 of the Central Excise Valuation Rules, the assessable value must include the money value of any such additional consideration directly or indirectly flowing to the assessee. The fact that similar goods were sold to other buyers without such charges, that the dies were separately excisable, or that apportionment involved accounting difficulty did not alter the character of the payment as part of the consideration for the goods.

Conclusion: Tooling charges or part die cost were rightly includible in the assessable value of the extrusions, and the challenge to their inclusion failed.

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