Optional accessories excluded from excise valuation where bought-out cables were not integral to manufactured communication sets

Bought-out co-axial feeder cables supplied with base station and walkie-talkie sets were held not includible in assessable value for excise valuation because they were traded items, not part of the manufacturing activity. The record showed the sets were sometimes sold without the cables, and there was nothing to show the equipment could not function without them. On those facts, the cables were treated as optional accessories rather than integral components, so their value was excluded from the assessable value of the manufactured goods.

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Issues: Whether the value of co-axial feeder cables, purchased from outside and supplied with base station/walkie talkie sets, was includible in the assessable value of the manufactured sets.

Analysis: The cables were found to be bought-out items dealt with in trading operations and not as part of the manufacturing activity. The record also showed that the sets were sold without the cables in some cases, and nothing in the impugned order established that the equipment could not function without them. On these facts, the cables were not integral to the sets but were merely optional accessories.

Conclusion: The value of the co-axial feeder cables was not includible in the assessable value of the base stations and walkie talkie sets, and the appeal succeeded.

Final Conclusion: Purchased optional accessories that are not integral to the manufactured goods are excluded from the assessable value for excise purposes.

Ratio Decidendi: For valuation of excisable goods, the value of a bought-out item is not includible when it is not an integral component of the manufactured product and is supplied only as an optional accessory.

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