1977 (1) TMI 150 - Commissioner - Central Excise

Summary

Issues:
1. Determination of assessable value of Refrigerators under Central Excise Rules.
2. Inclusion of value of Voltage Stabilizer in assessable value.
3. Consideration of service charges in the assessable value.

Analysis:
1. The appellants, holding a license for manufacturing Refrigerators, declared an assessable value of Rs. 1,800/- for the Refrigerators sold to dealers. However, subsequent verification revealed sales to a related firm at a higher price. The Assistant Collector determined the net assessable value to be Rs. 2,200/-, including the value of the stabilizer and service charges. The appellants argued that sales were also made to independent wholesale dealers at the same price, establishing a wholesale cash price at the factory gate. The appellate authority agreed, setting the wholesale cash price at Rs. 2,000/-, allowing a 10% trade discount.

2. Regarding the value of the Voltage Stabilizer, it was found that the stabilizer was not an inseparable part of the Refrigerator and could be sold separately. The appellate authority set aside the Assistant Collector's decision to include the stabilizer's value in the assessable value, emphasizing the stabilizer's separate identity in the market.

3. The appellants claimed that service charges were for five years and should not be included in the assessable value. The appellate authority examined the warranty information provided by the appellants, which did not mention service charges. It was noted that service charges are typically included in the price of the Refrigerator and not charged separately. Therefore, the inclusion of service charges in the assessable value was upheld, and the deduction claimed by the appellants was disallowed.

In conclusion, the wholesale cash price of the Refrigerators at the factory gate was determined to be Rs. 2,000/-, with the stabilizer's value excluded from the assessable value. However, the service charges were considered part of the assessable value. The Assistant Collector's order was modified accordingly.