Assessable value for excise excludes separately supplied bought-out items when the manufactured equipment functions independently.

The value of bought-out items supplied separately with manufactured transmission equipment is not automatically includible in the assessable value for central excise. Where the evidence showed that the transmission equipment could function independently and the purchased items, such as monitoring devices, were installed separately for auxiliary purposes, their value could not be added to the duty base. The Tribunal therefore rejected the Revenue's attempt to load the value of the bought-out goods into the assessable value and upheld the exclusion of those items from central excise valuation.

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Issues: Whether the value of bought-out goods supplied along with the manufactured transmission equipment was includible in the assessable value for central excise duty.

Analysis: The respondents had cleared the goods manufactured by them on payment of excise duty and separately supplied bought-out items such as L.C.T. and Network Manager. The adjudicating authority had relied on the principle that merely because software or ancillary items are supplied along with a main product, their value does not automatically form part of the assessable value of the manufactured goods. The record showed that the transmission equipment was capable of functioning independently and that the bought-out items were installed separately for monitoring purposes. On that basis, the Tribunal found no force in the Revenue's contention that the value of the bought-out goods had to be added to the value of the manufactured goods.

Conclusion: The value of the bought-out goods was not includible in the assessable value. The Revenue's appeal was dismissed and the respondent was held entitled to consequential relief.

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