1989 (9) TMI 226 - AT - Central Excise

Summary

Issues:
1. Inclusion of value of Wheel Kits in the assessable value of suitcases.
2. Recovery of differential duty on old stock due to price revision.

Analysis:

Issue 1: Inclusion of value of Wheel Kits in the assessable value of suitcases

The appeal challenged an order by the Collector of Central Excise and Customs, Pune, demanding duty for not including the value of Wheel Kits in the assessable value of suitcases manufactured by the appellants. The appellants argued that the Wheel Kits were optional accessories, not integral parts of the suitcases, and therefore should not be included in the assessable value. They presented evidence that not all suitcases were sold with Wheel Kits, emphasizing that the kits were provided only if desired by the customers. The appellants cited a similar order by another Executive Collector in their favor, supporting their contention that the Wheel Kits were accessories, not essential parts. The Tribunal agreed with the appellants, citing various legal precedents where accessories were not considered integral parts of the main product. Therefore, the Tribunal ruled in favor of the appellants, holding that the value of Wheel Kits should not be added to the assessable value of the suitcases.

Issue 2: Recovery of differential duty on old stock due to price revision

The second issue pertained to the recovery of differential duty on old stock sold at higher prices due to price revisions. The appellants argued that once goods were cleared and duty paid based on the assessable value at the time of clearance, subsequent price revisions should not affect the duty liability. They relied on the definition of "place of removal" under the Central Excises and Salt Act, which includes the factory or premises where goods are produced or manufactured. The Tribunal concurred with the appellants, stating that goods cleared from the factory after payment of duty should not be subject to additional duty based on subsequent price changes. The Tribunal found merit in the appellants' argument and ruled in their favor on this issue as well.

In conclusion, the Tribunal set aside the impugned order, ruling in favor of the appellants on both issues. The appeal was allowed, and the appellants succeeded in their challenge against the Collector's order demanding duty on Wheel Kits and differential duty on old stock due to price revisions.