TMI Blog2005 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... es for determination is - whether the department was right in including the cost of sockets and the value of service charges in the assessable value of m.s./g.i. pipes. 3.The appellant herein has filed its price lists under Rule 173C in the form of Part-II in respect of m.s./g.i. pipes for approval with the department, in which it claimed deduction towards service charges and cost of sockets from the assessable value of m.s./g.i. pipes. According to the department, the sockets fitted to the pipes were the essential parts of the pipes; they enabled the functioning of pipes and in absence of the sockets, the said m.s./g.i. pipes could not be said to have been completed as the sockets were the essential parts for joining the pipes to each ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred by the assessee beyond the point of clearance, the said charges were not includible in the assessable value of the pipes. According to the appellant, these charges did not contribute to the character of the goods in question. They were like inspection charges or storage charges and, therefore, they were not includible in the assessable value of the pipes. 5. We do not find any merit in the above arguments advanced on behalf of the appellant. The essential basis of valuation under Section 4 of the Act is the wholesale cash price charged by the appellant. Normal price under Section 4(1)(a) constituted a measure for levy of excise duty. In the present case, we are concerned with assessment and not with classification. Duty under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner 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 fully satisfied in this case and consequently, the cost of the said sockets was includible in the assessable value of the said m.s./g.i. pipes. On behalf of the appellant, it has been contended that the test of essentiality is not the correct test. We do not find any merit in this argument. We have applied the test of essentiality in several cases, particularly in order to distinguish a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was right in including the said service' charges in the assessable value of m.s./g.i. pipes. 10. Before concluding, we may point out that the sockets in question were bought out items, as held by the Commissioner. The cost of the sockets was includible in the assessable value and, therefore, the appellant was entitled to take Modvat credit on the duty paid on the sockets, subject to the appellant's producing duty paid documents to the department within eight weeks from the date of receipt of the judgment. In fact, directions to that effect have been given by the Tribunal in the impugned judgment. 11. In the result, there is no merit in this civil appeal and the same is accordingly dismissed, with no order as to costs. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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