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TMI Blog2005 (12) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances, the functional test stood fully satisfied in this case and consequently, the cost of the said sockets was includible in the assessable value of the said m.s./g.i. pipes. On behalf of the appellant, it has been contended that the test of essentiality is not the correct test. We do not find any merit in this argument. On the question of service charges incurred by the appellant, it is find that the said charges were includible in the assessable value because they were not in the nature of trade discount. The sockets in question were bought out items, as held by the Commissioner. The cost of the sockets was includible in the assessable value and, therefore, the appellant was entitled to take Modvat credit on the duty pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghu Udhyog Nigam Ltd. for procuring orders/payments from various departments of the State Government and that the matter was squarely covered by the decision of this Court in the case of Coromandel Fertilisers Ltd. v. Union of India Others reported in 1984 (17) E.L.T. 607. 4.According to the appellant, sockets were bought out duty paid items. They were independent excisable goods answering different tariff classification contained in the Schedule to the Tariff Act. According to the appellant, the sockets were not manufactured by them. According to the appellant, the sockets were duty paid accessories. According to the appellant, the sockets were not components of m.s./g.i. pipes. According to the appellant, the activity of fitting a soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in AIR 1984 SC 420]. 6.On facts of this case, the adjudicating authority has found that pipes were cleared from the place of removal (factory gate) with the sockets fitted thereto. Further, the appellant had charged its customers for the said sockets. It is true that in the present case, the sockets were bought by the appellant from the market before they were fitted to the said m.s./g.i. pipes. However, the appellant had cleared the pipes fitted with the sockets and it had charged its customers for the pipes fitted with the sockets and, therefore, the department was right in loading the price of the pipes with the cost of the sockets. 7.In the case of Hindustan Polymers v. C.C.E., reported in 1989 (43) E.L.T. 165, this Court has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onary, "socket" is defined as a pipe end enlarged to pass over a same-sized pipe to make a joint. Therefore, sockets not only contributed to the functioning of the pipes, it constituted a part of m.s./g.i. pipes. As stated, the customer was charged with the price of the socket when the appellant sold the m.s./g.i. pipes with the sockets. Hence, the department was right in including the cost of the sockets in the assessable value of m.s./g.i. pipes. 9.Similarly, on the question of service charges incurred by the appellant, we find that the said charges were includible in the assessable value because they were not in the nature of trade discount. Deduction of service charges of the nature indicated in this case does not fall within the dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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