1997 (5) TMI 154 - AT - Central Excise

Summary

Issues involved: The appeal concerns the includability of the value of an electric motor supplied with power-driven pumps.

Summary:
The issue in the appeal pertains to whether the value of the electric motor supplied with power-driven pumps should be included. The lower appellate authority considered the contract to be for the supply of the pump fitted with the motor, treating them as separate entities. The appellant's advocate cited a previous decision where it was held that the power source is not an integral part of the pump. The Tribunal explained the functional and commercial distinction between a pump and an electric motor, stating that the motor is not essential for the marketing of the pump. The Tribunal found that the electric motor is supplied optionally and not compulsorily, thus its value should not be included in the assessable value of the pumps. The appellant argued that the facts of the present case align with the previous decision, warranting exclusion of the motor's value. The Department's representative contended that the goods should be assessed based on the contract for supply, which includes both the pump and motor. After considering both arguments and relevant Section Notes, the Tribunal concluded that the motor and pump should not be assessed as one entity. Therefore, the appeal was allowed in favor of the appellants.

This judgment clarifies the distinction between a power-driven pump and an electric motor supplied with it, emphasizing that the motor's value may not necessarily be included in the assessable value of the pump.