1976 (8) TMI 152 - Commissioner - Central Excise

Summary

Issues:
Assessable value determination including cost of legs, packing, and service charges for T.V. sets manufactured and cleared by the appellants.

Assessable Value Determination - Cost of Legs:
The Assistant Collector had upheld the demand for duty on the cost of legs, packing, and service charges as part of the assessable value of the T.V. sets. The appellants argued that legs and packing are optional, with legs being sold separately in some instances. The Commissioner noted that the T.V. sets were sold both with and without legs, indicating two distinct types of goods. It was determined that if legs were supplied with the T.V. sets, their price should be included in the assessable value, while if not supplied, the price of legs should not be included. The Commissioner emphasized that T.V. sets with legs and without legs are not identical goods, warranting a difference in their pricing.

Assessable Value Determination - Packing Charges:
Regarding packing charges, the appellants explained that packing included internal cloth or flamed cover and an outer cardboard cover or packing case, charged separately. While the internal packing was deemed inseparable from the T.V. sets, the outer cover was not. As the appellants failed to demonstrate separate identification of expenses for the cloth cover and packing case, the Commissioner ruled that the entire packing cost should be included in the assessable value.

Assessable Value Determination - Service Charges:
The appellants' servicing charges, post-manufacturing expenses, were also under scrutiny. The Commissioner disagreed with the Assistant Collector's argument that service charges paid at the time of purchase should be included in the assessable value. It was reasoned that any charges to be claimed from wholesale customers would only be done at the time of selling the T.V. sets. Consequently, the deduction of servicing charges from the wholesale cash price to determine the assessable value was permitted. The Commissioner modified the Assistant Collector's order accordingly, accepting the appeal to the same extent.