Assessable value of tractors excludes optional exempt accessories fitted before clearance, as excise applies only to the manufactured goods.

Excise duty on tractors was held to be confined to the value of the manufactured tractor as the excisable article, and not to include optional accessories fitted before clearance. Hour meters and wheel weights were found to be non-essential components, separately exempt from duty, and supplied only at the purchaser's option; their pre-removal attachment did not justify adding their value to the tractor's assessable value. The time of clearance fixes valuation, but it does not permit inclusion of exempt accessory value where the levy would otherwise extend beyond the excisable goods themselves. The impugned excise demands and appellate orders were therefore unsustainable.

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Issues: Whether the assessable value of tractors manufactured by the petitioners could include the value of optional accessories, namely hour meters and wheel weights, fitted before clearance from the factory, when those accessories were not essential components of the tractor and were separately exempt from excise duty.

Analysis: Excise duty under the charging provision is leviable on the excisable article manufactured, here the tractor under Item 34(3a), and the relevant assessable value must relate to the finished excisable goods as such. The evidence showed that hour meters and wheel weights were not essential parts of a tractor, that a tractor could be marketed and operated without them, and that they were fitted only at the option of purchasers. If their value were added to the tractor merely because they were attached before removal, the levy would in substance extend beyond the tractor and would indirectly burden accessories that were separately exempt from duty. The fact that the assessable value is determined at the time of clearance does not justify including the value of non-essential, optional, exempt accessories in the price of the excisable article.

Conclusion: The value of hour meters and wheel weights could not lawfully be included in the assessable value of the tractors, and the impugned excise demands and appellate orders were unsustainable.

Ratio Decidendi: In computing excise duty on a manufactured article, the assessable value cannot include the value of optional and separately exempt accessories that are not essential components of the excisable goods merely because they are fitted before clearance from the factory.

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