1987 (7) TMI 224 - AT - Central Excise

Summary

Issues Involved:
1. Whether the Thermal Overload Protector (TOP) supplied by M/s. Voltas Ltd. is an accessory or an integral device.
2. Whether the value of such accessories could be added to the assessable value.

Summary:

Issue 1: Whether the TOP is an accessory or an integral device.
The respondents argued that the TOP was an optional accessory and not an integral part of the stator/rotor set, as the stator/rotor could function without it. They cited precedents where accessories were not considered essential parts of the main product. The Assistant Collector initially held that the TOP was an integral part, but the Appellate Collector later determined it was merely an additional device for safety and not essential to the electric motor/stator/rotor. The Tribunal considered the function and installation of the TOP, noting that it is wired in series with the motor windings and improves the motor's efficiency. Ultimately, it was concluded that the TOP is an integral part of the motor, not merely an accessory.

Issue 2: Whether the value of such accessories could be added to the assessable value.
The respondents contended that the value of the TOP should not be included in the assessable value as it was supplied free of cost by M/s. Voltas Ltd. The Tribunal referenced several legal precedents, including the Supreme Court's ruling in the Bombay Tyre International case, emphasizing that all components contributing to the value of an article should be included in its assessable value. The Tribunal concluded that the value of the TOP, being an integral part of the motor, should be included in the assessable value of the rotor/stator set.

Final Order:
In accordance with the majority view, the value of the thermal overload protector shall be included in the assessable value of the rotor/stator.