Assessable value under excise cannot include bought-out items not manufactured by the assessee or forming part of the excisable goods.

Value of bought-out items supplied with a furnace was held not includible in the assessable value for excise duty because the items were not manufactured in the assessee's factory, were not subjected to any manufacturing process at the factory or customer site, and were not shown to be integral parts of the furnace or accessories for erection or commissioning. Applying the settled principle that non-manufactured bought-out components not forming part of the excisable goods cannot be added to assessable value, the demand was unsustainable and excise duty was not payable on those items.

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Issues: Whether the value of bought out items supplied along with the furnace was liable to be included in the assessable value for levy of excise duty.

Analysis: The items in question were not manufactured in the appellant's factory and were not subjected to any manufacturing process at the factory or at the customer site. They were supplied only at the customer's request and were not shown to be integral parts of the furnace or accessories used for erection or commissioning. The Tribunal also relied on the settled principle that bought out components not manufactured by the assessee and not forming part of the excisable goods cannot be added to the assessable value.

Conclusion: The value of the bought out items was not includible in the assessable value and excise duty was not payable on those components.

Final Conclusion: The demand was unsustainable and the appeal succeeded with consequential relief.

Ratio Decidendi: Bought out items not manufactured by the assessee and not forming part of the excisable goods cannot be included in the assessable value for excise duty.

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