Commercial discount not added to assessable value where revenue failed to prove any real non-commercial element.

A higher discount granted to one purchaser of a by-product was not required to be added back to assessable value where the difference was supported by commercial factors, including storage and pipeline transportation facilities. The revenue's theory that the respondent would otherwise have incurred corresponding costs was treated as speculative, and the authority cited by the department was found inapplicable on its facts. The differential discount was therefore not disallowed, the valuation-based demand failed, and the assessee's valuation position was upheld. A price concession supported by commercial considerations cannot be treated as extra-commercial consideration unless a real non-commercial element is established.

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Issues: Whether the higher discount allowed to one purchaser of the by-product was liable to be disallowed on the ground that the difference arose from extra commercial consideration and had to be added to the assessable value.

Analysis: The differential discount was found to be linked to commercial factors, including the facilities made available for storage and pipeline transportation, and not to any non-commercial arrangement. The alleged inference that the respondent would otherwise have incurred corresponding costs was treated as speculative. The authority cited by the department was held inapplicable on its facts.

Conclusion: The discount was not disallowed, and the demand based on differential value was not sustained.

Final Conclusion: The department's challenge failed and the assessee's valuation position was upheld.

Ratio Decidendi: A price concession supported by commercial considerations cannot be treated as extra commercial consideration for inclusion in assessable value unless the revenue establishes a real non-commercial element.

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