Assessable value of drilling rigs excludes bought-out accessories unless they are integral components as cleared from the factory.

The value of bought-out items used with drilling rigs was not includible in the rigs' assessable value because the rigs were commercially complete when cleared from the factory. Items such as substitutes, slips, spider and spider bushings, drill collars and traveling blocks were treated as tools, accessories or operating equipment, not integral components of the rig as cleared. The principle applicable to goods removed in incomplete or unassembled form was distinguished, since the rig was not cleared in that condition. The earlier view excluding drill rods, pipes and drill tools from assessable value was applied.

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Issues: Whether the value of bought-out items such as substitutes, slips, spider/spider bushings, drill collar and traveling block, used with drilling rigs, was includible in the assessable value of the rigs as integral parts.

Analysis: The drilling rig was found to be commercially complete when cleared from the factory. The disputed items were used in conjunction with the rig, but they did not form part of the rig itself and were in the nature of tools, accessories or operating equipment. The reliance placed on the principle applicable to goods cleared in incomplete form was distinguished because, unlike such cases, the rig here was not removed in unassembled consignments. The earlier view excluding drill rods, pipes and drill tools from the assessable value of drilling rigs was held to apply.

Conclusion: The disputed bought-out items were not integral parts of the drilling rig and their value was not includible in the assessable value.

Ratio Decidendi: Items used with a machine do not become part of its assessable value unless they are shown to be integral components of the machine as cleared from the factory.

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