1996 (10) TMI 274 - AT - Central Excise

Exclusion of Optional Electric Motors from Assessable Value Upheld by Tribunal

The Tribunal affirmed that the value of Electric Motors supplied optionally and not fitted to Power-driven Pumps or Agitators at the time of clearance ... Valuation Issues Involved:1. Inclusion of the value of Electric Motors in the assessable value of Power-driven Pumps (PD Pumps) and Agitators.2. Applicability of the larger period of limitation u/s 11A of the Central Excise Act, 1944.Summary:1. Inclusion of the value of Electric Motors in the assessable value of PD Pumps and Agitators:The respondent, engaged in manufacturing PD Pumps and Agitators, was clearing these items along with Electric Motors upon buyers' request without including the value of Electric Motors in the assessable value. The Assistant Collector and Collector (Appeals) held that Electric Motors, being bought-out items supplied optionally and not fitted to PD Pumps or Agitators at the time of clearance, should not have their value included in the assessable value of PD Pumps or Agitators. The Tribunal upheld this view, emphasizing that Electric Motors are distinct articles and not integral parts of PD Pumps or Agitators. The Tribunal referenced several decisions, including Uptron India Ltd. v. Collector of Central Excise and Kosan Metal Products Pvt. Ltd. v. Union of India, which supported the notion that bought-out items supplied optionally and not essential for the operation of the main product should not have their value included in the assessable value.2. Applicability of the larger period of limitation u/s 11A of the Central Excise Act, 1944:The appellant contended that the non-disclosure of clearance of bought-out Electric Motors along with PD Pumps and Agitators was deliberate and intended to evade duty, thus invoking the larger period of limitation u/s 11A of the Act. However, the Assistant Collector and Collector (Appeals) found no misstatement or suppression of facts by the respondent, and the Tribunal agreed, rendering the proviso to Section 11A(1) inapplicable. Consequently, the Tribunal did not find it necessary to delve into the limitation issue further.Conclusion:The Tribunal dismissed the appeal, affirming that the value of Electric Motors supplied optionally and not fitted to PD Pumps or Agitators at the time of clearance should not be included in the assessable value of these goods. The larger period of limitation u/s 11A of the Central Excise Act, 1944, was also found inapplicable due to the absence of any deliberate misstatement or suppression of facts by the respondent.