Assessable value excludes interest on delayed payment in factory-gate credit sales under central excise valuation principles.

Interest attributable to delayed payment in factory-gate credit sales is not includible in assessable value under section 4 of the Central Excise Act, 1944. The Tribunal applied the Supreme Court's valuation principle that where goods are sold on credit at the factory gate, interest for the period between delivery and realisation of price does not form part of the assessable value. It found that the Commissioner (Appeals) had erred in allowing deductions on that basis and directed valuation to be determined in line with the Supreme Court's directions. The assessee therefore succeeded on the valuation issue.

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Issues: Whether interest on delayed payments in respect of credit sales made at the factory gate could be included in the assessable value under section 4 of the Central Excise Act, 1944.

Analysis: The Tribunal applied the Supreme Court's valuation principle that interest on delayed payments in credit sales made at the factory gate, for the period from delivery of goods till realisation of price, is not includible in the assessable value. It held that the Commissioner (Appeals) had erred in permitting deductions on this basis and required the valuation to be determined in accordance with the Supreme Court's directions.

Conclusion: Interest on delayed payments could not be added to the assessable value where the sales were credit sales at the factory gate, and the assessee succeeded on this issue.

Ratio Decidendi: Interest attributable to delayed payment on factory-gate credit sales is not includible in assessable value under section 4 of the Central Excise Act, 1944.

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