2017 (12) TMI 211

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ister concern. Along with the containers manufactured in the appellant's factory, the appellant also supplied bottle caps which were procured from outside. The valuation of goods for payment of duty for supply to their sister concern was done on the basis of rule 8 of the Central Excise Valuation Rules 2000. For this purpose the appellant submitted costing as per CAS-4 standards. The Department observed during audit that the costing of the plastic body did not include value of the bought out bottled caps. Department was of the view that duty needs to be paid on the value of the full bottle including the bought out cap. Accordingly, differential duty was demanded along with interest and penalty. Aggrieved by the decision, the present appeal ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r payment of excise duty. It is a matter of common sense that the plastic bottle becomes complete only with the addition of the cap. Instead of saying that the bought out items have been supplied with the manufactured goods, it will be more appropriate to say that complete plastic bottles were supplied by the appellant to their sister units. In terms of section 4 of the Central Excise Act, duty is required to be paid on the value of the goods supplied. In the case of decision Neycer India Ltd. (supra) relied by the appellant, the Hon'ble Apex Court has held that the value of bought out items optionally supplied with own products are not to be included. In the case of Metal Box of India Ltd. (supra) the Hon'ble Apex Court has dismissed the R....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....em (socket in this case), which was intrinsically necessary to place the pipes on the market then the cost of such an item had to be loaded to the normal price of the pipes. 8. Applying the above tests to the facts of the present case, we find, as stated above, that the sockets were fitted on the said m.s./g.i. pipes before their clearance. It has been concurrently found by the Commissioner as well as by the Tribunal that the sockets were fitted on the threaded portion of the pipes. It has been found that the said sockets enabled the functioning of the pipes. It is found that the sockets were essential for functioning of the pipes. They were required for joining the pipes to each other. In the circumstances, the functional test stood ful....