1998 (7) TMI 200 - AT - Central Excise

Summary

Issues:
1. Inclusion of value of "Circlips" in the assessable value of automobile piston assembly.

Detailed Analysis:
The appeal by revenue challenges the Order-in-Appeal passed by the Collector of Central Excise, where the inclusion of the value of "Circlips" in the assessable value of the piston assembly is disputed. The main issue revolves around whether Circlips, bought out items packed with pistons and gudgeon pins, should be considered an essential part of the sub-assembly. The respondents, manufacturers of automotive parts, supply these items separately or as a kit, allowing buyers the option to purchase them together or separately. The revenue argues that Circlips are essential for the sub-assembly's operation as they retain gudgeon pins on the piston shaft, making them integral to the product. They cite legal precedents to support their stance, emphasizing that the items are packed together and enrich the value of the final product.

On the other hand, the respondents contend that Circlips are not always supplied with pistons and gudgeon pins, indicating they are not essential components. They highlight that Circlips are bought out items, not manufactured by them, and are part of their trading activity. Legal references are made to support their argument, asserting that Circlips fall under a specific tariff classification and should not be considered parts of pistons. They draw parallels with previous cases where the value of bought out items included in kits was not deemed assessable.

The Tribunal carefully considers both arguments and legal precedents cited. It notes that the test of essentiality has been discarded in previous cases and emphasizes that Circlips being optional accessories for certain buyers supports their classification as accessories. The fact that Circlips can be purchased separately from the market further strengthens this argument. Ultimately, the Tribunal finds no fault with the Order-in-Appeal, rejecting the revenue's appeal and upholding the decision that the value of Circlips should not be included in the assessable value of the piston assembly.