Assessable value includes functionally essential parts, while short-levy demands may fail on limitation where departmental error is shown.

A grill treated as functionally necessary for blower type evaporative coolers was held to be an integral part of the product, so its value was includible in assessable value under the tariff. The fact that accessories were sold separately and the ISI standard was relied on did not alter excisability, which depended on the product's nature and the part's actual function. On limitation, where price lists had been filed and approved and the department had the opportunity to verify inclusion of grill value, the short levy was treated as arising from departmental inadvertence and the demand beyond one year under Rule 10 was held time-barred.

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Issues: (i) Whether the value of the grill formed part of the assessable value of blower type evaporative coolers. (ii) Whether the demand of duty on the grill value was barred by limitation under Rule 10 of the Central Excise Rules.

Issue (i): Whether the value of the grill formed part of the assessable value of blower type evaporative coolers.

Analysis: The grill was treated as functionally necessary for blower type coolers because it controlled and directed the air flow and the coolers were not complete in that form without it. The reliance placed on the ISI standard and on the fact that accessories were sold separately was not accepted, since excisability had to be decided on the nature of the product under the tariff and on the actual function of the part in question.

Conclusion: The grill was held to be an integral part of blower type coolers and its value was includible in the assessable value.

Issue (ii): Whether the demand of duty on the grill value was barred by limitation under Rule 10 of the Central Excise Rules.

Analysis: The price lists had been filed and approved, and the records showed that the departmental officers had opportunity to verify whether the grill value had been included. On that basis, the short levy was treated as having occurred through inadvertence or error on the part of the officers concerned, bringing the demand within the limitation objection raised by the appellant.

Conclusion: The demand beyond one year was held to be time-barred under Rule 10 and was directed to be withdrawn.

Final Conclusion: The appeal succeeded on limitation in respect of the barred portion of the duty demand, while the inclusion of grill value in the assessable value of blower type coolers was upheld.

Ratio Decidendi: A part that is essential to the functional completeness of a product is includible in its assessable value, but a duty demand for short levy attributable to departmental inadvertence is confined by the applicable limitation period.

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