ORDER
S.L. Peeran, Member (J)
1. This appeal arises from the order-in-appeal dated 25-10-1985 passed by the Collector (Appeals), Madras. The question that arises for consideration in this appeal is as to whether the value of the steel plate is required to be added to the value of the battery manufactured and supplied by the appellants to their purchasers M/s. Mac-neill and Magor Ltd. The case of the appellant is that the battery is cleared from Bangalore factory and that the steel plates which are supplied by the customer is received by them at Depot, Calcutta, where these batteries received from Bangalore factory are fitted together before supply to the supplier as per contract. The department on perusal of the contract, noticed steel tray being fitted with Batteries received from Bangalore factory and therefore, issued a show cause notice dated 8-10-1984 alleging that fixing of steel tray to the battery is an ancillary process to the completion in the manufacture of such Fork lift batteries. On that ground it was stated that the value of the steel tray is required to be added to arrive at the assessable value as per Section 4 of Central Excises and Salt Act, 1944. This claim was resisted by the assessee on various grounds, which was negatived. The Learned Collector was also not impressed with the arguments and hence rejected the same and confirmed the original-in-original with observations that duty is required to be computed after ascertaining the value of the tray from the supplier.
2. Arguing for the appellants the Learned Consultant submitted that till date the department has not computed the duty nor raised any demands thereafter, thus, it shows that the department is still not clear about their stands. It is his contention that battery which is cleared from factory is a complete product by itself and used as such and duty has been paid thereon. It is his contention that the steel trays have also discharged its duty and the same was received at Calcutta depot and what is being done is only fitting operation and it does not bring into existence new goods. It is his contention the steel trays are in the nature of ancillaries and not component part of the battery. In this regard, he draws support from number of judgments particularly from the judgment rendered in the case of In re: Sharco Industries Pvt. Ltd. as reported in 1982 (10) E.L.T. 509 (GOI) wherein it was held that the value of bracket is not to be included in the assessable value of horn. He also relied on the judgment rendered in the case of Col-Tubes (P) Ltd. v. Collector of Central Excise, as reported in 1994 (72) E.L.T. 342 which is based on the judgment of Bombay High Court rendered in the case of A.Z. Metal Industries Pvt. Ltd. v. Collector of Central Excise as reported in 1992 (62) E.L.T. 724. In both these rulings it was held that value of plastic cannot be added to the aluminium tubes, although both are fitted together. He also referred to an earlier judgment of the Tribunal rendered in the case of Metal Box of India Ltd. v. Collector of Central Excise, as reported in 1983 E.L.T. 956 which according to him is now confirmed by Hon’ble Supreme Court as can be noticed in 1990 (45) E.L.T. A33. He further drew support from another judgment rendered in the case of Diamond Clock Manufacturing Co. Ltd. v. Collector of Central Excise as reported in 1988 (34) E.L.T. 662 wherein it has been held that value of the Modvat items like cables, bracket and adopter were to be added to the value of meters. He further referred to judgment rendered in the case of BHEL v. Collector of Central Excise as per Order No. 446/86-B1, dated 23-7-1986 and that of Singarani Collieries Co. Ltd. v. Collector of Central Excise as per Order No. 175/87-B1, dated 23-3-1987. He submits that since this issue has been fully decided in all these judgments, the ratio would apply to the facts of the case and therefore, the assessee’s contention is required to be accepted.
3. The Learned DR submitted that the steel plate is manufactured as per specification which gets fitted to the battery and hence it becomes a part of the battery and therefore its value is required to be added, although the process of fitting has not taken place in the factory but at the depot at Calcutta.
4. We have carefully considered the submissions made by both the sides and have perused the record as well as the judgments cited before us. The battery which is manufactured and cleared by the appellants have discharged its duty. The supplier by his contract desire the assessee to fix the steel plates to the Battery to facilitate its installation in the Fork lift truck. In terms of the said contract, they had fitted the trays at their depot, at Calcutta, before supplying the same to the customer. Now the question is as to whether the value of the steel trays is required to be added to the value of Batteries as per Section 4 of the Central Excise Act, 1944. The view taken by the lower authorities is that the tray becomes part and parcel of the battery, inasmuch as fixing the steel plate to the battery is an ancillary process to the completion of the manufacture of such Fork lift batteries. In that view the department is seeking the addition of value of steel plates to the value of the battery. The answer has to be given in the negative. The reason being that the battery which is cleared from the factory is in a fully manufactured form and no further processes are required for its completion for the purpose of fitting the battery for use in Fork lift. For the purpose of fitting the battery in the Fork lift truck certain accessories are required. Such accessories are not used as essential inputs of a Battery and by such use, no ancillary process to the completion of manufacture occurs, as contended by the Revenue. Hence, steel plate cannot be considered as part and parcels of the battery as contended by the department. This view expressed by us finds support from the ratio of rulings rendered by Government of India, Tribunal, Bombay High Court and by Hon’ble Supreme Court in the citations brought to our notice by the Learned Consultant. We do not find any reason to differ from these judgments and on application of these ratio.
5. In that view of the matter, the impugned order is not sustainable and hence the same is set aside by allowing the appeal.