2000 (1) TMI 525 - AT - Central Excise

Summary

Issues:
1. Valuation of a product supplied to Railways including 'bought out items'
2. Whether the 'bought out items' should be included in the assessable value of the product

Analysis:
1. The appeal was filed against the order of the Commissioner (Appeals) who remanded the matter for re-consideration of the value of a product supplied to Railways, which included 'Data Acquisition and Processing Equipment for Modern Oscillograph Cars'. The appellant contended that the value of 'bought out items' should not be added to the product's value supplied to Railways. The appellant manufactured certain items in their licensed premises and obtained other items termed as 'bought out items' for the Railway wagons.

2. The appellant argued that the 'bought out items' were fully manufactured and functional, serving as accessories to the main product manufactured in their premises. One of the alleged items, 'ruggedisation', was claimed to be charges per set and not physical goods. The appellant emphasized that these charges should not be added to the value of the product supplied to Railways.

3. The Revenue representative contended that the 'bought out items' were essential for the product's performance supplied to Railways, rejecting the appellant's claim that they were mere accessories. It was highlighted that the appellant had not previously raised the argument that the 'bought out items' were accessories.

4. The Tribunal considered the submissions and found that the deductions available in a previous order of the Tribunal in the appellant's case would be applicable. Regarding the eligibility of deducting the values of 'bought out items', it was noted that there was no determination by the lower authority on the nature of these items. The Tribunal emphasized that if the 'bought out items' were auxiliary or accessories not essential for the final product, their value should not be added. As the matter was already remanded before the Assistant Collector, the Tribunal allowed the appeal, remanded the matter, and directed the Assistant Collector to determine whether the values of 'bought out items' could be added or deductions allowed.

5. The appeal was allowed for re-determination, emphasizing the need to follow the principles of natural justice. The Tribunal disposed of the appeal accordingly, providing guidance for the re-evaluation of the product's value supplied to Railways.