2000 (12) TMI 639 - AT - Central Excise

Inclusion of Free Components in Assessable Value Upheld by Tribunal

INTERNATIONAL AUTO PRODUCTS (P) LTD. Versus CCE., JAMSHEDPUR

The Tribunal held that the value of components provided free of cost by M/s. TELCO should be included in the assessable value of the final product ... Valuation - Modvat Issues involved: The issue involves whether the cost of components sent by M/s. TELCO under Rule 57F(2) should be included in the assessable value of the product manufactured by the job worker and cleared on payment of duty. Comprehensive Details of the Judgment: The appellants, engaged in manufacturing Floor Plate Assembly, received parts free of cost from M/s. TELCO under Rule 57F(2) for the manufacture of the final product. The Revenue contended that the value of these parts should be included in the assessable value of the final product, leading to a demand of duty. The appellants argued for Modvat credit on duty paid by M/s. TELCO and that the demand should be set aside as it is revenue-neutral. The Tribunal considered the submissions and found that M/s. TELCO cleared inputs to the appellants under Rule 57F(2) with permission and after due procedure. The appellants used these parts along with their own for manufacturing, and the duty was paid on the assessable value, including the value of parts from M/s. TELCO. Referring to previous decisions, the Tribunal held that the value of free items is included in the assessable value of the final product as per Section 4 of the Central Excise Act. Regarding Modvat credit, the Tribunal noted that M/s. TELCO had already availed credit on duty paid on inputs, so the appellants cannot claim it again. The Tribunal dismissed the appeal, stating that the duty demanded cannot be extended as Modvat credit to M/s. TELCO. The appellants were directed to make their claim to the proper officer for consideration.