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Issues:
1. Whether the Department can include the value of certain accessories in the assessment of tractors for excise duty. Analysis: The appeal before the High Court of Bombay involved a dispute between the Union of India and International Tractor Company of India Limited regarding the inclusion of the value of hour meters and wheel weights in the assessment of tractors for excise duty. The Department had levied excise duty on the tractors by including the value of these accessories, which were not manufactured by the Company but purchased from the market and fitted on certain tractors sold to customers upon request. The Company contended that as the accessories were not essential parts of the tractors and were exempt from duty, their value should not be included in the assessment. The Department, relying on Section 4 of the Central Excises and Salt Act, argued that the value of accessories should be deemed part of the assessable value of the tractors. However, the High Court held that since the accessories were not necessary components of the tractors and were exempt from duty, their value should not be included in the assessment. The Court emphasized that the accessories in question were not manufactured by the Company and were not essential components of the tractors. The Company only fitted these accessories on certain tractors sold to customers upon request. The Court noted that the duty was payable on the tractors themselves under a specific item in the Act, and the duty exemption applied to the accessories. The judgment highlighted that the value of accessories could not be included in the assessable value of the tractors, especially considering they were not manufactured by the Company and were not essential components of the tractors. In the appeal, the Department contended that the value of the hour meters and wheel weights should be included in the assessable value of the tractors based on Section 4 of the Act, which determines the value of an article chargeable to duty. However, the Court rejected this argument, stating that as the accessories were not necessary components of the tractors and were exempt from duty, their value could not be included in the assessment. The Court found no merit in the appeal and dismissed it, allowing the respondent's Advocate to withdraw the costs deposited by the appellant for the appeal. In conclusion, the High Court of Bombay ruled in favor of International Tractor Company of India Limited, holding that the Department could not include the value of hour meters and wheel weights in the assessment of tractors for excise duty. The judgment emphasized that since the accessories were not essential components of the tractors and were exempt from duty, their value should not be considered in determining the assessable value of the tractors.
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