2004 (8) TMI 196 - AT - Central Excise

Tribunal rules toothpaste tube caps as accessories, not part of assessable value

The Tribunal ruled that plastic caps supplied with plastic tubes for toothpaste packaging are accessories and not integral parts, following precedents ... Valuation (Central Excise) - Toothpaste tubes Issues:1. Duty on plastic caps supplied with plastic tubes.2. Classification of plastic caps as integral or non-integral part.3. Applicability of previous decisions on similar cases.4. Value of accessories in determining assessable value.Analysis:1. The case involved a situation where a consignment of plastic caps was intercepted during transportation from one company to another, which were to be used for capping plastic tubes used for toothpaste packaging. The issue was whether the value of these caps should be included in determining the duty paid on the tubes by the manufacturing company.2. The Tribunal considered previous decisions, such as in the case of Col. Tubes (P) Ltd., where it was established that plastic caps were deemed as accessories and not integral parts of the tubes. The Supreme Court had upheld this decision, emphasizing that accessories or non-integral parts cannot be included in the assessment of the main product's value for duty purposes. Therefore, the proposal to add the cost of caps to the assessable value of the tubes was not upheld.3. The Revenue relied on the Burn Standard Co. Ltd. case to argue for the inclusion of the value of free supplies like caps. However, it was noted that in that case, the item supplied was an integral part of the product, unlike the caps in the present case, which were not considered integral to the toothpaste tubes. Therefore, the Burn Standard case did not support the Revenue's argument.4. The appellants referred to a previous decision in their own case, where the value of caps was added based on a different judgment. However, the Tribunal found that the circumstances in that case were not similar, as the decision was related to printing on bottles, which was integral to the product. The Tribunal concluded that the value of caps as accessories should not be added to the assessable value of the tubes, and therefore set aside the Commissioner's order, allowing the appeal.