1996 (10) TMI 195 - AT - Central Excise

Summary

Issues Involved:

1. Inclusion of the value of consumables (toner, developer, selenium drum, and cleaning cassette) in the assessable value of copiers.
2. Inclusion of the value of stands in the assessable value of copiers.
3. Penalty imposed on the appellant.

Detailed Analysis:

1. Inclusion of the Value of Consumables in the Assessable Value of Copiers:

Toner and Developer:
The Tribunal held that toner and developer are consumables that mix during the copier's operation to provide ink for copying. They are not essential parts of the copier and their value cannot be included in the assessable value of the copier.

Selenium Drum:
The selenium drum was deemed an integral part of the copier. The Tribunal noted that without the drum, the copier cannot function as intended. The drum is not a consumable but a component that is essential for the copier's operation. Therefore, its value must be included in the assessable value of the copier.

Cleaning Cassette:
The cleaning cassette was also considered an integral part of the copier. It is necessary for the copier's operation as it cleans the drum during the copying process. Consequently, the value of the cleaning cassette must be included in the assessable value of the copier.

2. Inclusion of the Value of Stands in the Assessable Value of Copiers:

The Tribunal found that the stands were supplied with the copiers and were part of the overall transaction. The stands were procured by a sister concern of the appellant and sold at a significantly higher price to the buyers of the copiers. The Tribunal concluded that a substantial part of the value of the copiers was shifted to the stands to evade excise duty. However, it was determined that the entire price of the stands should not be included in the assessable value of the copiers. Instead, only the price exceeding Rs. 225 per stand should be included as additional consideration for the copiers.

3. Penalty Imposed on the Appellant:

The Tribunal upheld the penalty imposed on the appellant under Rule 173Q(1) of the Central Excise Rules, finding no grounds to interfere with the Collector's decision.

Conclusion:

The impugned order was modified as follows:
- The value of toner and developer is not to be included in the assessable value of the copier.
- Only the price of the stands exceeding Rs. 225 per stand is to be included in the assessable value of the copiers.
- The differential duty payable by the appellant will be computed afresh by the Collector.