Assessable value under Central Excise excludes optional hose fittings not proved to be part of the factory clearance.

Cost of end fittings, couplings and flanges attached to rubber hoses was not includible in the assessable value of the hoses under Section 4 of the Central Excise Act where the evidence showed that bare hoses were the principal clearances and the fittings were supplied only on specific customer request. The fittings were optional, and when required the hoses were sent to job workers for attachment rather than being proved to have been affixed in the manufacturer's factory. On that basis, the fittings were not shown to form an inseparable part of the value of the hoses, and the demand, penalty and confiscation could not be sustained.

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Issues: Whether the cost of end fittings, couplings and flanges attached to rubber hoses was includible in the assessable value of the hoses under Section 4 of the Central Excise Act.

Analysis: The fittings were supplied only when customers specifically required complete assemblies, while the bulk of the product was cleared as bare hoses. The evidence showed that the fittings were optional and that, where required, the hoses were sent to job workers for attachment of the fittings. The Revenue did not establish that the fittings were affixed in the appellants' factory or that their cost formed an inseparable part of the value of the bare hoses.

Conclusion: The cost of the end fittings, couplings and flanges was not includible in the assessable value of the hoses, and the demand, penalty and confiscation could not be sustained.

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