1998 (7) TMI 200

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....he "Circlips" which are bought out items but often packed along with the automobile pistons and gudgeon pins by the appellants is to be included in the assessable value of the said piston assembly. 2. Heard learned Consultant Shri Vijayaraghavan for the respondents and learned JDR Smt. Aruna Gupta for the appellants. 3. Briefly, the undisputed facts involved are that the respondents are manufacturers of automotive pistons, gudgeon pins, etc. Their supplies are both to OE manufacturers of automobile engines as well as to wholesale buyers as replacement spares. Supplies to OE buyer is normally under one invoice which covers 3 items viz., pistons, gudgeon pins and circlips, but they are packed separately and not as a kit. For c....

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....ading activity. 5. Learned Consultant submits that there is no infirmity in the impugned order-in-appeal for the following reasons :- (a) Since circlips are not always supplied along with pistons and gudgeon pins, therefore, this clearly demonstrates that it is not an essential item. (b) It is not in dispute that circlips are not manufactured by them but are merely bought out by them and, therefore, with respect to these the respondents only engaged in trading activity. (c) Simply because sometimes they are packed together as a single kit, it does not make circlips as essential components of this sub-assembly. (d) Circlips are general purpose items clearly covered under sub-heading 7318.21 of the Cent....

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.....T. 102 (Tribunal), wherein, it was held in Para 4 that when bought out items are supplied besides, manufactured articles, the value of articles is not includible even if they are essential for the operation of manufactured goods provided they are not fitted or attached to the goods before clearance and no process is undertaken on such bought out items. He submitted that in their case no process is undertaken on the bought out circlips and the circlips are not fitted to the piston assembly at the time of its clearance. Therefore, even if it is found that the circlips are essential for the operation of this assembly applying the ratio of the aforesaid position the value thereof is not includible. (h) He also cited the case of CCE v. ....

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.... now found to be res integra. The test of essentiality has been discarded in 1996 (85) E.L.T. 102 (Tribunal); Radiant Electronics supra and 1988 (34) E.L.T. 662 (Tribunal); Diamond Clock Manufacturing Co. Ltd. cited supra. The test of packing together as a kit is also discarded in the case of M/s. Surana Telecom Ltd. by the High Court order supra as also in the Final Order No. 1617/97 by this very Tribunal in the case of M/s. Ashok Leyland Ltd. supra. As regards the test of whether circlips are accessories, we find that the very fact that to OE buyers they are not supplied packed together and also in certain sub-assemblies like those for certain two wheelers and four wheelers, they are not supplied along with the piston and the gudgeon pins....