1996 (3) TMI 334 - AT - Central Excise

Summary

Issues: Inclusion of cost of Stylus in assessable value of gramophones/record players

Detailed Analysis:
The appeal was filed by M/s. Peico Electronics & Electricals Ltd. challenging the order-in-appeal passed by the Collector of Central Excise (Appeals), Calcutta, regarding the inclusion of the cost of Stylus in the assessable value of gramophones/record players. The appellants argued that the Stylus was cleared separately and only fitted in the Pick Up Heads at their service center, not at the factory. However, the Collector held that the Stylus was an essential part of the gramophones/record players and its cost should be included in the assessable value.

The matter was scheduled for hearing, but no one appeared for the appellants. The notice was sent to the appellants, but there was no response. The learned SDR for the respondents argued that the Stylus was cleared along with the gramophones/record players and was an essential component of the Pick Up Head, which cannot function without the Stylus/Needle. The SDR emphasized that even if the Stylus was a bought-out item, its value should be included in the assessable value of the finished product.

Upon careful consideration, the Tribunal noted that the Stylus was cleared from the factory along with the Pick Up Heads, even though it was not immediately inserted in the Pick Up Heads. The appellants contended that the Stylus was purchased from outside and cleared from the factory separately. However, the Tribunal emphasized that the Stylus was an essential part of the Pick Up Head, which, in turn, was crucial for the gramophones/record players. The Tribunal reiterated that the cost of bought-out items must be included in the value of the finished product if they are integral to the finished product and cleared from the factory.

The Tribunal compared the current case with an earlier decision where Pick Up Heads were cleared without Stylus. In the present case, the Pick Up Heads were cleared with the Stylus, although the Stylus was not physically inserted in the Pick Up Heads during clearance. Ultimately, the Tribunal found no fault in the Collector's order-in-appeal and dismissed the appeal, upholding the inclusion of the Stylus cost in the assessable value of the gramophones/record players.

This detailed analysis highlights the key arguments, considerations, and conclusions made by the Tribunal regarding the inclusion of the Stylus cost in the assessable value of the gramophones/record players, providing a comprehensive overview of the legal judgment.