Assessable value excludes separately supplied dental hand-pieces not integrated into manufactured dental chairs.

Imported dental hand-pieces and related equipment supplied separately, and not assembled or fitted into the dental chairs by the assessee, were treated as a distinct trading supply rather than part of the manufacturing process. The chairs had their own controls, the hand-pieces were sometimes supplied independently of the chair, and the digital pulp tester was self-contained and not required to be integrated with the chair. On those facts, the value of goods supplied only in separate trade could not be added to the assessable value of the manufactured dental chairs. The exclusion of that value was upheld in favour of the assessee.

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Issues: Whether the value of imported dental hand-pieces and related equipment, supplied separately and not assembled into the dental chair by the assessee, was liable to be added to the assessable value of the dental chairs manufactured and cleared by the assessee.

Analysis: The hand-pieces were found not to have been assembled or fitted into the dental chairs by the assessee. The chairs were manufactured with their own controls, while the hand-pieces were supplied separately to dentists, sometimes independently of the chair supply. One item, the digital pulp tester, was self-contained and not required to be fitted to the chair controls. On these facts, the supply of the hand-pieces was treated as a trading activity and not as part of the manufacturing process undertaken by the assessee. The value of goods forming only a separate trading supply could not be brought into the assessable value of the manufactured dental chairs.

Conclusion: The value of the hand-pieces was not includible in the assessable value of the dental chairs, and the issue was decided in favour of the assessee.

Ratio Decidendi: Goods supplied separately in the course of trading activity, without being manufactured into or integrated with the excisable product by the assessee, cannot be added to the assessable value of that product.

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