Assessable value includes integral component value where the battery is indispensable to the UPS system's functioning.

The value of a component is includible in the assessable value of the final excisable product when the component is integral and indispensable to the completed system. A battery supplied with a UPS system was treated as part of the composite supply because the UPS could provide uninterrupted power only when the battery took over on mains failure. Separate purchase, separate invoicing, exemption under a notification, or the fact that the battery was not manufactured by the assessee did not change its character as a component. The battery's value was therefore included in the UPS assessable value.

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Issues: Whether the value of the battery supplied with the uninterrupted power supply system was includible in the assessable value of the UPS system.

Analysis: The battery was supplied as part of the composite contract for supply, erection, supervision and commissioning of the UPS system. It was separately invoiced, but functionally it was an integral and indispensable component of the system because the UPS could provide uninterrupted supply only when the battery automatically took over during failure of the mains. The fact that the battery was separately purchased, exempt under a notification, or not manufactured by the assessee did not alter its character as a component of the final excisable product. The value of a component used in the manufacture of the final product forms part of the intrinsic and commercial value of that product when the component is essential to the completed system.

Conclusion: The value of the battery was includible in the assessable value of the UPS system and the contention to the contrary was rejected.

Final Conclusion: The appeal failed and the assessable value of the UPS system was upheld by including the value of the battery as part of the final product.

Ratio Decidendi: Where a component is an integral and indispensable part of the final excisable product, its value is includible in the assessable value of that product even if the component is separately procured, separately invoiced, or exempt from duty.

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