Inclusion of Bought-Out Items in Assessable Value Upheld by Tribunal

The Tribunal held that the value of bought-out items used in the erection of a boiler should be included in the assessable value of the boiler. The respondent's argument that the boiler is non-excisable after installation was rejected as it was not raised earlier, and duty was paid at the time of clearing the boiler. The Tribunal distinguished this case from others where the full boiler did not come into existence in the factory. As a result, the impugned order was set aside, and the revenue's appeal was allowed, with the respondent's cross objection disposed of accordingly.

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Issues: Whether the value of bought out item is to be added to the value of the boiler manufactured by the respondent.

Analysis:
1. The appeal raised the issue of whether the value of bought-out items should be included in the assessable value of a boiler manufactured by the respondent. The revenue argued that the bought-out items should be added to the value of the boiler, citing a previous Tribunal decision. The respondent contended that the value of bought-out items should not be included in the assessable value of the boiler, emphasizing that the boiler is non-excisable after installation.

2. The Tribunal found no merit in the respondent's argument that the boiler is non-excisable after installation, as this point was not raised before the lower authorities. Additionally, since duty was paid at the time of clearing the boiler from the factory, indicating that the boiler was manufactured in the factory and cleared in CKD condition for ease of transportation, the Tribunal rejected this contention.

3. The Tribunal observed that the respondent received an order for a boiler, which was manufactured in the factory and cleared in CKD condition. While certain parts were purchased from the market and directly supplied at the site, these parts were deemed essential for the boiler. In line with a previous decision, the Tribunal held that the value of bought-out items used in the erection of the boiler should be included in the assessable value of the boiler. The Tribunal distinguished this case from another case where the full boiler did not come into existence in the factory, clarifying that in the present case, the boiler was being cleared in CKD condition, indicating that the respondents were manufacturing and clearing the boiler as a whole unit with bought-out items as essential parts.

4. Consequently, the impugned order was set aside, and the appeal filed by the revenue was allowed. The cross objection filed by the respondent was also disposed of accordingly.

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