Tribunal includes battery value in UPS assessable value, deeming it essential for uninterrupted power supply

The Tribunal upheld the Collector of Central Excise's decision to include the value of the battery in the assessable value of the uninterrupted power supply (UPS) system manufactured by M/s. Kerala State Electronics Development Corp. Ltd. The Tribunal deemed the battery as an essential and indispensable component for ensuring uninterrupted power supply, aligning with precedents emphasizing the inclusion of crucial parts in the assessable value of the final product. The decision emphasized the significance of the battery in maintaining continuous power supply in industries sensitive to power interruptions.

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Issues involved:
The inclusion of the value of the 'Battery' in the assessable value of the 'uninterrupted power supply' system.

Summary:
The case involved M/s. Kerala State Electronics Development Corp. Ltd. manufacturing uninterrupted power supply (UPS) systems. The dispute arose when the value of the stationary storage battery, an integral part of the UPS system, was not included in the assessable value. The Collector of Central Excise held that the value of the battery should be part of the assessable value based on the Supreme Court decision in Narne Tulaman case.

The appellants argued that the battery was a bought-out item and not essential for the UPS system to function without interruption. They cited cases where the value of optional accessories or bought-out items was not included in the assessable value of the main product. The respondents contended that the battery was crucial for the UPS system to provide uninterrupted power supply, referencing various decisions where essential parts were included in the assessable value.

After considering the arguments, the Tribunal found that the battery was an integral and indispensable part of the UPS system, providing uninterrupted power supply during interruptions. The contracts with customers included the supply of batteries, and even extra charges were levied for increasing battery capacity. The Tribunal emphasized the importance of the battery in maintaining continuous power supply in industries sensitive to power interruptions.

The Tribunal rejected the appeal, confirming that the value of the battery should be included in the assessable value of the UPS system, as it was an essential component for ensuring uninterrupted power supply. The decision aligned with previous rulings emphasizing the inclusion of essential components in the assessable value of the final product.

This summary highlights the key arguments and findings in the judgment regarding the inclusion of the battery value in the assessable value of the UPS system.

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