Assessable value includes fitted bought-out items on complete goods, affecting SSI exemption eligibility under central excise rules.

Bought-out items such as tyres, discs, tubes and flaps supplied by customers are not automatically excluded from assessable value merely because they are essential to the manufactured goods. Where such items are fitted or attached to trailers before clearance and the goods are cleared as a complete product, their value is includible in assessable value. On that basis, the turnover crossed the SSI exemption ceiling under Notification No. 1/93-C.E., making the revised duty reduction unsustainable and restoring the original demand.

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Issues: Whether the value of tyres, discs, tubes and flaps supplied by customers and fitted to trailers before clearance was includible in the assessable value, and whether such inclusion crossed the SSI exemption ceiling under Notification No. 1/93-C.E.

Analysis: Bought-out items are not includible in assessable value merely because they are essential for the functioning of the manufactured goods. However, where such items are fitted or attached to the finished goods before clearance and are cleared as a complete product, their value forms part of the assessable value. On such inclusion, the turnover exceeded the prescribed SSI limit.

Conclusion: The value of the fitted bought-out items was includible in the assessable value, and the demand restored to the original amount was sustainable. The appeal was therefore allowed in favour of the Revenue.

Final Conclusion: The reduction of duty by excluding the value of fitted bought-out items was unsustainable, and the original duty demand stood revived.

Ratio Decidendi: Bought-out items supplied for use with manufactured goods are includible in assessable value when they are fitted or attached to the goods before clearance as part of a complete product.

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