Assessable value of ceiling fans includes regulator value where trade practice treats it as part of the product; limitation upheld.

Where trade practice and product specification treat the regulator as part of a ceiling fan, its value forms part of the fan's assessable value and cannot be excluded as a separate accessory. On the facts recorded, ceiling fans were ordinarily supplied with regulators, and the regulator was treated as part and parcel of the excisable product; the inclusion in assessable value was upheld. The demand was also held to be within time because the show cause notice for short-levied duty was issued within the one-year limitation period prescribed under the excise rules. The revision application therefore failed.

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Issues: (i) Whether the value of regulators supplied with ceiling fans was includible in the assessable value of the fans; (ii) whether the demand was barred by limitation under the relevant excise rules.

Issue (i): Whether the value of regulators supplied with ceiling fans was includible in the assessable value of the fans.

Analysis: The record showed that, during the relevant period, regulators were ordinarily supplied with ceiling fans, although separately billed in some cases. The specification relied upon treated the regulator as part of the fan, and the surrounding trade practice supported the view that a fan was ordinarily marketed with its regulator. On that footing, the regulator was treated as part and parcel of the ceiling fan rather than as a separate accessory whose value could be excluded from assessment.

Conclusion: The value of the regulator was correctly included in the assessable value of the ceiling fan, against the assessee.

Issue (ii): Whether the demand was barred by limitation under the relevant excise rules.

Analysis: The show cause notice covered duty short-levied for the period from 3-9-1973 to 30-12-1973 and was issued on 30-8-1974. The authority found that this was within the one-year period prescribed by the applicable limitation rule for recovery of short-levied duty.

Conclusion: The demand was within time and was not barred by limitation, against the assessee.

Final Conclusion: The revision application failed because the regulator was held to form part of the ceiling fan for valuation purposes and the demand was found to have been raised within the prescribed limitation period.

Ratio Decidendi: Where a component is treated by trade practice and specification as part of the excisable product, its value forms part of the assessable value, and a demand issued within the prescribed limitation period is valid.

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