TMI Blog1996 (2) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... ue declared by them in their price lists. Two show cause notices were issued to them on 2-3-1993 and 2-11-1993 alleging evasion of Central Excise duty of Rs. 7,31,700/- and Rs. 19,57,677.90 for the periods August, 1992 to January, 1993 and February, 1990 to July, 1992 respectively. The cases were adjudicated by the Collector of Central Excise, Meerut confirming the duty demands and imposing penalties of Rs. 10 lakhs and Rs. 2 lakhs under orders dated 16-12-1993 and 10-5-1994 respectively. The present appeals have been filed against these orders. 2. Arguing the case of the appellants, Shri D.B. Shroff, learned Advocate submitted that the vacuum cleaners cleared from their factory with standard accessories are complete articles even without the attachments in question which are optional accessories supplied only where these are required by the customers. These accessories are bought out items not received in the factory at all and are not cleared alongwith the vacuum cleaners but received and supplied by the depots. The item cleared from their factory is not an incomplete or semi-finished article as held by the Collector. The learned counsel referred to various judgments and order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts for exclusion of the value of the disputed accessories in the assessable value of the product. (1) 1977 (1) E.L.T. (J 133) (Bom.) - International Tractor Co. of India Limited v. Union of India - Wheel Weights and hour meters are not essential parts of Tractor which can operate without these parts. These two accessories are not fitted to all the tractors but fitted only at the option of the customers. (2) Auto Control (P) Limited v. Collector of Central Excise - 1993 (63) E.L.T. 156 (Tribunal) - Carbon Ribbon and Correction Tape are in the nature of consumable goods. Price thereof not includible in assessable value of Electronic Typewriter. (3) National Radio Electronics Co. Ltd. v. Collector of Central Excise - 1995 (76) E.L.T. 436 (Tribunal) - Cost of bought out items excludible if they were optional and supplied at the special request of the customer. (4) Uptron India Limited v. Collector of Central Excise, Allahabad - 1994 (73) E.L.T. 848 (Tribunal) - Cost of bought out items and accessories fitted or attached to goods before clearance includible in value of the goods but not includible if they are fitted at the option of the customer unless there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otected stator/rotor. It was fixed even while the stator was under the process of manufacture and before it was fully finished. The majority view in the said case was that the TOP should be considered as part of the rotor or stator and that its value should be included in the assessable value. It was observed that the TOP, whatever its function may be, is part and parcel of the motor, being wired in series with the main winding. The decisions cited on behalf of the Lawkim it was held, would not justify an assumption that a part which is incorporated in the main article could be notionally removed merely on the ground that it performs an accessory and not an essential function and that, in principle, it would not be open to a manufacturer to market a particular article and yet seek the exclusion from its assessable value of certain parts of the article as cleared and marketed on the ground that they are not incorporated in his main article or are not essential to its operation. The analogy of the parts of a car was considered by both the learned members who took the majority view. They observed as follows :- 22. A car manufacturer can demand that as a car can run without ammeter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urer should be at liberty to constructively or notionally strip down the products he has made by asking for the exclusion of certain parts on the ground that they are not essential and, therefore, are only accessories. Actually in Para 65 of the report the Tribunal s observation is that the Legislature could not have intended such an exclusion. 7. Examining the present matter in the light of these observations and the ultimate decision in the aforesaid case, we find that the disputed item TOP formed part of the rotors/stators at the time of clearance of the latter from the factory and that it is not so in the present case. The Collector has held that without the items claimed by the appellants as optional accessories, the product vacuum cleaner is not a complete product. The cleaner alongwith the three items referred to as standard accessories constitutes the excisable product. The other items are not brought to the factory and cleared therefrom. They are attachments which provide additional facilities and perform extra functions. When any of these optional accessories is to be put to use for the desired specific purpose, the same is to be fitted to the machine in lieu of the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to examine whether they were essential or optional ones the direction was to exclude the cost of bought out items if they were optional. In the other case [Kerla State Electronics Development Corporation v. Collector - 1994 (71) E.L.T. 508] it had, however, been held that Battery is an integral and indispensable part of the UPS system and accordingly the value of battery is to be included in the assessable value of UPS System. While taking note of the said decision, the Tribunal observed in the National Radio and Electronics case that it was not an issue in that case whether the cost of optional items was to be included or not. In the light of these findings, we are of the opinion that the present case stands on a different footing and the case of the appellants is on stronger ground than some of the decisions directing exclusion of the cost of the items claimed as optional accessories and supplied with the main article. For one thing, the optional accessories in the case before us are supplied from the depot and are not fitted to or supplied alongwith the vacuum cleaner when the same are cleared from the factory. Secondly, these are attached to an already fully manufactured and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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