Free-supplied drawings and designs are excluded from assessable value for central excise duty on manufactured components.

The notional cost of drawings and designs supplied free of cost by the buyer to the vendor was not includible in the assessable value of parts and components manufactured by the vendor for central excise purposes. The Tribunal followed its earlier ruling in Denso India Private Limited, which had held that free-supplied drawings and designs from Maruti to its vendors could not be added to assessable value. On that binding view, the impugned order was set aside and the appeal was allowed.

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Issues: Whether the notional cost of drawings and designs supplied free of cost by the buyer to the vendor was includible in the assessable value of parts and components manufactured by the vendor and cleared to the buyer for the purpose of payment of central excise duty.

Analysis: The issue was covered by the Tribunal's earlier decision in Denso India Private Limited, where it was held that the notional cost of drawings and designs supplied free of cost by Maruti to its vendors could not be included in the assessable value of the parts and components manufactured and cleared to Maruti for central excise purposes. Following that binding view, the impugned order was liable to be set aside.

Conclusion: The notional cost of free-supplied drawings and designs was not includible in the assessable value, and the appeal was allowed.

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