1. This appeal is preferred by the Union of India against the judgment dated June 28 1977 E.L.T. 133 delivered by Mr. Justice Rege allowing the petition filed by International Tractor Company of India Limited seeking a writ of certiorari for quashing certain orders of the Assistant Collector of Central Excise whereby excise duty was levied on the tractors manufactured by the petitioners by including in the assessable thereof, the value of the hour meter and the wheel weight.
2. The facts which have been given to rise to the finding of the petition are not in dispute and the short question which requires answer is whether it is open for the Department while assessing value of the tractors manufactured by the respondent Company to include the value of certain accessories. It is not in dispute between the parties that the duty is payable on the tractors under Item 34(3)(a) of the 1st Schedule to the Central Excises and Salt Act, 1944 (hereinafter referred to as the 'Act'). It is also not in dispute that duty is not payable on the manufacture of hour meters and wheel weights as the duty is exempted by the Notification issued by the Central Government from time to time. The department did not dispute that the hour meters and the wheel weights are not essential parts of the tractor. These accessories are fitted to some of the tractors sold by the Company on the request of the customers. The Company does not manufacture hour meters or the wheel weights in their factory but purchases them from the market and these accessories are fitted only on certain tractors which are sold by the Company. On these undisputed facts, the Company protested that it is not open for the Department to include the value of the hour meters and wheel weights while assessing the value of the tractors for payment of excise duty. The Department rejected the contention and proceeded to levy the duty on the tractors by including the value of the accessories. Thereupon, the petitioners approached this Court by filing the petition under Art. 226 of the Constitution of India and the petition was allowed by the learned trial Judge by the impugned judgment.
3. Shri Shah, the learned Counsel appearing in support of the appeal, very fairly stated that the only contention urged on behalf of the Department before the trial Judge was one which is set out in paragraph 23 of the Affidavit of Shri V. M. Desai, Assistant Collector, Central Excise. The contents of this paragraph indicate that the claim of the Department is that the value of the hour meters and the wheel weights is required to be included in the assessable value of the tractors is view of the provisions of S. 4 of the Act. The section provides that when article is chargeable to duty at the rate depending on the value of the article, such value shall be deemed to be the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold, at the time of removal of the article from the licensed premises. Shri Shah made a faint attempt to submit that as the tractors were removed from the factory premises of the Company after the accessories were fitted, the provisions of S. 4 of the Act are attracted. It is impossible to accept this submission. The accessories are not manufactured by the respondent Company but are purchased from the market. The accessories are not liable to payment of any excise duty in view of the exemption notification issued by the Central Government. As the accessories which were fitted to some of the tractors are not necessary components of the tractors, in our judgment, it is impossible to suggest that the value of the accessories could be included while determining the assessable value of the tractors. The judgment of the trial Judge suffers from no infirmity and there is no merit whatsoever in the appeal.
4. Accordingly, the appeal falls and is dismissed with costs. The advocate for the respondent is at liberty to withdraw the amount deposited by the appellant towards the costs of the appeal and in case any balance is left out. The appellant's advocate is at liberty to with draw the same.