Assessable value of batteries excludes separately supplied bought-out electrolyte and extra vent plug components under central excise law.

Separately supplied bought-out items that are not integral parts of dry charged batteries are not includible in the batteries' assessable value under central excise law. Electrolyte supplied separately remained excludible because the batteries could be marketed without it and HSN Chapter 8507 treats storage batteries as classifiable even when presented without electrolyte; no cenvat credit was taken on the electrolyte. Likewise, an additional micro porous vent plug with float supplied separately was excludible because the fitted vent plug already formed part of the battery value, while the extra component was a separate bought-out item on which no cenvat credit was availed.

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Issues: (i) Whether the value of electrolyte supplied separately along with dry charged batteries was includible in the assessable value of the batteries; (ii) whether the value of micro porous vent plug with float supplied separately was includible in the assessable value of the batteries.

Issue (i): Whether the value of electrolyte supplied separately along with dry charged batteries was includible in the assessable value of the batteries.

Analysis: The dry charged batteries were shown to be capable of being supplied and marketed without electrolyte. The technical literature and the HSN notes for Chapter 8507 indicated that storage batteries remain classifiable under that heading even when presented without electrolyte. The electrolyte was supplied separately as a bought-out item, and no cenvat credit had been taken on it.

Conclusion: The value of electrolyte was not includible in the assessable value of the dry charged batteries.

Issue (ii): Whether the value of micro porous vent plug with float supplied separately was includible in the assessable value of the batteries.

Analysis: The record showed that the vent plug and float already fitted to the battery had been included in the battery value, while the additional micro porous vent plug with float was supplied separately as an extra bought-out component. No cenvat credit had been availed on these additional items. Such separately supplied additional components could not be treated as part of the assessable value of the main product.

Conclusion: The value of micro porous vent plug with float was not includible in the assessable value of the dry charged batteries.

Final Conclusion: The appeal failed because the disputed separately supplied items were not parts or components of the dry charged batteries for valuation under central excise law.

Ratio Decidendi: Separately supplied bought-out items that are not integral parts of the excisable goods and on which no cenvat credit is availed are not includible in the assessable value of the main product.

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