TMI Blog1991 (7) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ome part of the complete wagon and lose their identify. It hardly matters how and in what manner the components of the wagon are procured by the manufacturer, so long as the appellant is manufacturing and producing the goods called "wagons" it is liable to pay duty of excise on the normal value of the wagon. The contention of the learned counsel for the appellant cannot be accepted that the value of the "free supply items" should not be included in the assessable value of the wagons manufactured by the appellant. No infirmity in the reasoning and the findings reached by the Division Bench of the High Court. Appeal dismissed - 3041 of 1988 - - - Dated:- 16-7-1991 - K. N. Singh and Kuldip Singh, JJ. [Judgment per : Kuldip Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the excise duty be not computed and charged on the value of the completed wagon including that of the "free supply items". The appellant challenged the show cause notices by way of writ petition under Article 226 of the Constitution of India before the Calcutta High Court which was heard by a learned Single Judge who allowed the writ petition and quashed the demand raised by the central excise authorities. The learned Judge came to the conclusion that the excise duty could only be charged on the basis of invoice value under the contract. The learned Judge based his conclusions on the following reasoning : "There is no dispute that certain items of finished components are supplied by the Railway Board to the petitioner. The value of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Act, as the manufacturing cost of a complete wagon cannot be conceived of without taking into account or consideration the cost of free supply items. We hold that the valuation cost of the free supply items should be included in the manufacturing cost of wagons. We think that Section 4(1)(a) of the Act applies in this case and as such, the valuation of excisable goods will be charged or will take place when manufacture takes place. Thus, we also find and hold that while determining the valuation of wagons for charging the duty, the Revenue Authorities had acted duly and with justification, in adding the cost of free supply items under the provisions of the said Act as indicated above, the more so when, under the agreement in this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this section, be deemed to be - (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale : ……………………. (b) where the normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed." 7. Section 3 of the Act provides for levy of the duty of excise. It is a levy on goods produced or manufactured in India. Section 4 of the Act lays down the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India and Others - 1988 (38) E.L.T. 535 (SC) = [1989] 3 SCC 488, M.N. Venkatachaliah, J. speaking for the Court observed as under: "Duties of excise are imposed on the production or manufacture of goods and are levied upon the manufacturer or the producer in respect of the commodity taxed. The question whether the producer or the manufacturer is or is not the owner of the goods is not determinative of the liability." 9. We, therefore, cannot accept the contention of the learned counsel for the appellant that the value of the "free supply items" should not be included in the assessable value of the wagons manufactured by the appellant. We see no infirmity in the reasoning and the findings reached by the Division Bench of the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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