Assessable value includes buyer-supplied inputs when essential materials supplied free affect the price of excisable goods.

Free-supplied malleable cast iron inserts provided by the buyer were held includible in the assessable value of concrete sleepers because the exemption applied only where the invoice price reflected the actual sole consideration for sale and was not depressed by contractual arrangements. The valuation of the inserts at Rs. 18.00 was upheld because no reliable material showed a lower real money value, and the admitted lack of correct price information supported the adjudicating authority's estimate. Non-disclosure of the Railway contract and the free supply of inserts in the declaration and invoices amounted to suppression of facts, so the extended period of limitation applied and the duty demand was within time.

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Issues: (i) Whether the value of malleable cast iron inserts supplied free of cost by the Railways was includible in the assessable value of the concrete sleepers cleared under Notification No. 120/75-C.E.; (ii) Whether the value of the inserts was correctly taken at Rs. 18.00; and (iii) Whether the demand was barred by limitation or extended time applied on account of suppression of facts.

Issue (i): Whether the value of malleable cast iron inserts supplied free of cost by the Railways was includible in the assessable value of the concrete sleepers cleared under Notification No. 120/75-C.E.

Analysis: The exemption under Notification No. 120/75-C.E. applied only where the invoice price represented the actual price charged and the sole consideration for sale, and where the invoice price was not influenced by any commercial or contractual relationship other than the sale itself. The inserts formed an integral part of the sleepers and were supplied free under the contract, which affected the price of the finished goods. The assessable value had to reflect the intrinsic value of the product and not exclude the cost of essential components supplied by the buyer.

Conclusion: The value of the free-supplied inserts was includible in the assessable value and the Revenue's contention was accepted.

Issue (ii): Whether the value of the inserts was correctly taken at Rs. 18.00.

Analysis: The respondents did not show that the lower figure of Rs. 11.50 plus 4% represented the real money value of the inserts, and they had admitted lack of correct price information. The adjudicating authority's view that Rs. 18.00 represented the normal prevailing price was therefore upheld.

Conclusion: The valuation at Rs. 18.00 was confirmed.

Issue (iii): Whether the demand was barred by limitation or extended time applied on account of suppression of facts.

Analysis: The declaration filed under the notification did not disclose the contract with the Railways, and the invoices also did not state that the inserts were supplied free of charge. On these facts, the non-disclosure amounted to suppression sufficient to attract the extended period of limitation.

Conclusion: The extended period applied and the demand was within time.

Final Conclusion: The order of the lower appellate authority was set aside and the duty demand as confirmed by the Assistant Collector was restored, resulting in success for the Revenue.

Ratio Decidendi: Where essential materials supplied free by the buyer influence the sale price of the finished excisable goods, their value forms part of assessable value; non-disclosure of such contractual facts can attract the extended period for recovery.

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