1996 (10) TMI 401 - AT - Central Excise

Tribunal excludes tool kits from assessable value of vehicles, supporting manufacturer in tax dispute

COLLECTOR OF CENTRAL EXCISE, PUNE Versus BAJAJ AUTO LTD.

The Tribunal held that tool kits, as bought-out items and not integral parts of vehicles, should not be included in the assessable value of two-wheelers ... Valuation Issues:Whether the value of tool kits is to be added to the value of two-wheelers and three-wheelers manufactured by the assessee.Detailed Analysis:1. Issue of Assessable Value:The primary issue in this case was whether the value of tool kits should be included in the assessable value of two-wheelers and three-wheelers manufactured by the assessee. The Assistant Collector had initially held that the tool kit is a part of the motor vehicle and should be considered in determining the assessable value. However, the party contended that tool kits are bought-out items and not manufactured by them. The Collector (Appeals) in two cases agreed with the party's argument that the cost of these bought-out items should not be added to the assessable value, while in another case, the Collector disagreed.2. Consolidation of Cases:Since the issue in all three cases was similar, they were clubbed together for a common order. This consolidation allowed for a comprehensive analysis of the legal arguments and evidence presented in each case.3. Arguments and Counterarguments:Both parties strongly presented their contentions before the Tribunal. The Department argued that the tool kits were cleared along with the vehicles based on the invoices provided by the party. On the other hand, the party's advocate contended that the tool kits were not supplied with the vehicles and referenced previous Tribunal decisions to support their position.4. Tribunal's Decision:After careful consideration of the facts, records, and legal arguments presented by both sides, the Tribunal disagreed with the Assistant Collector's view that the tool kit is a part of the vehicle. The Tribunal concurred with the Collector (Appeals) in the cases where it was held that the tool kits were bought-out items not supplied along with the vehicles. The Tribunal accepted the arguments of the assessee based on relevant case law and dismissed the appeals filed by the department while allowing the appeal filed by the party in one case. The cross-objections filed by the respondents in the first two cases were also disposed of accordingly.In conclusion, the Tribunal's decision clarified that tool kits, being bought-out items and not integral parts of the vehicles manufactured by the assessee, should not be included in the assessable value. The judgment provided a clear interpretation of the law in this context and resolved the issue in favor of the party appealing the decision of the Collector.