TaxTMI 
TaxTMI 
1996 (9) TMI 225
X X X X Extracts X X X X
X X X X Extracts X X X X
....) of Item No. 33 which covers industrial fans. They were bringing electric motors from outside and were invoicing them separately collecting higher amount from the customers than paid for such motors. In two appeals which had been disposed of by a common order by the Collector of Central Excise (Appeals), the cost of these motors did not form part of the final product. In the third appeal bearing No. E/387/87-A they had taken proforma credit in respect of the duty-paid electric motors, but did not include its cost while determining the assessable value of their final product and only reversed the credit taken on the electric motors. In all the three cases the duty demanded had been confirmed by the lower authorities. 2. When the matte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... electricity and the electric motor was an indispensable part of the same. The industrial fans could be of different varieties and could have a number of components, but in all electric motor was an essential part. The appellants were bringing electric motors and were charging for the same from their customers. These motors were tested, checked with reference to the parts manufactured by the appellants and they had to be correlated with the particular fans supplied to different customers. It is the settled position of the law that if the bought out items are in the nature of components and the raw materials, then their cost has to be included in the determination of the assessable value of the final product. In the case of Kirloskar Brother....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eld that while for the purposes of Section 4, the value of the free supplies had to be taken into account the position is different under Notification No. 120/75-C.E. which was an exemption notification issued under Rule 8(1) of the Central Excise Rules. Thus, on merits, we consider that the appellants have no case. 5. Now coming to the plea of limitation. The demands were issued under Rule 10 of the Central Excise Rules as in force subsequent to its amendment on 6-8-1977. During the relevant time Rule 10 prescribed a normal limitation of six months. The learned advocate had submitted that there was no allegation of any suppression in any of the show cause notices and that while the show cause notice dated 6-10-1978 was issued within ....