Excise valuation of computer peripherals excluded where bought out items were treated as accessories, not integral parts of the system.

Bought out peripherals supplied with computer systems under common purchase orders were held not to form part of the computers for excise valuation. The relevant tariff note invoked by the Revenue did not apply to the period in dispute, and the applicable Tribunal line treated such peripherals as accessories rather than integral constituent parts unless shown to be identifiable trade items forming part of the computer itself. On that basis, the value of the peripherals was excluded from the assessable value of the computers, and the valuation issue was decided in favour of the assessee.

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Issues: Whether the value of bought out peripherals supplied with computer systems under common purchase orders was includible in the assessable value of the computers.

Analysis: The appeal turned on whether the impugned items were integral parts of the automatic data processing system or only peripherals/accessories. The earlier Tribunal view, read with the applicable tariff scheme, treated such items as accessories where they were not shown to form part of the computer as an identifiable trade item. The Court noted that the relevant Chapter Note relied upon by the Revenue was not applicable for the disputed period and that the Commissioner (Appeals) had correctly followed the binding decisions holding bought out peripherals to be non-essential accessories rather than constituent parts for valuation purposes.

Conclusion: The value of the bought out peripherals was not includible in the assessable value of the computers, and the issue was decided against the Revenue and in favour of the assessee.

Ratio Decidendi: For excise valuation, bought out peripherals supplied with computers are not includible in assessable value unless they are shown to be integral constituent parts of the computer system under the applicable tariff provisions for the relevant period.

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