Excise valuation excludes distributor sales promotion payments where post-sale activities are outside the assessee's assessable stage.

For excise valuation, amounts paid to distributors for post-sale sales promotion activities were treated prima facie as outside the assessable value because the agreement indicated that the goods were first sold to distributors, who then carried out further sale and promotional work. On that basis, the Tribunal considered the distributors' subsequent activities irrelevant to valuation at the assessee's stage and found the appellant to have a strong prima facie case on the valuation issue. Duty and penalty recovery were therefore stayed pending disposal of the appeal.

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Issues: Whether, for the purpose of excise valuation, amounts paid to distributors for sales promotion activities were liable to be included in the assessable value, or whether the payments were in the nature of trade discount; and whether recovery of duty and penalty should be stayed pending appeal.

Analysis: The agreement placed before the Tribunal indicated, prima facie, that the goods were sold by the assessee to its distributors and that the distributors thereafter undertook further sale and promotional activities. On that basis, the post-sale activities of the distributors were treated as not relevant for valuation at the assessee's stage. The Tribunal also noted that the appellant had a strong case on the valuation issue.

Outcome: Duty and penalty recovery were directed to remain stayed during the pendency of the appeal, on a prima facie view in favour of the assessee.

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