SIDDARTHA TUBES LTD. versus COMMISSIONER OF CENTRAL EXCISE, INDORE (MP)

Citation: [2005] SUPP. 5 S.C.R. 859 · Decided: 16-12-2005 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

SIDDARTHA TUBES LTD. 
A 
v. 
COMMISSIONER OF CENTRAL EXCISE, INDORE (MP) 
DECEMBER 16, 2005 
[ASHOK BHAN AND S.H. KAPADIA, JJ.} 
B 
Central Excise Act, 1944/Central Excise Rules, 1944: 
s.4/r. 173-C-Sockets bought from market and got fitted to m.s.lg.i. 
pipes-Assessable value-Claim of assessee for deduction towards cost of C 
sockets and service charges-Held. Revenue was right in including the cost 
of sockets and service charges in assessable value of m.s.!g. i. pipes. 
Words and Phrases: 
'Sockets '-connotation of 
0 
Appellant, a manufacturer of m.s./g.i. pipes, bought sockets from the 
market and got the same fitted to the pipes through MP. Laghu Udyog Nigam 
Ltd. The appellant filed price list under Rule 173-C of the Central Excise 
Rule, 1944 claiming deduction towards service charges and cost of sockets 
from the assessable value of m.sJg.i. pipes. The adjudicating authority declined E 
to allow the deduction. The order was ultimately upheld by the Customs, Excise 
and Gold (Control) Appellate Tribunal. Aggrieved, the assessee filed the 
present appeal 
On the question: whether the department was right in including the cost F 
of sockets and the value of service charges in the assessable value of m.s./g.i. 
pipes. 
Dismissing the appeal, the Court 
HELD. 1.1. The essential basis of valuation under section 4 of the Central G 
Excise Act, 1944 is the wholesale cash price charged by the appellant Normal 
price under s. 4(1)(a) constituted a measure for levy of excise duty. The 
present case is with regard to assessment and not classification. Duty under 
s.4 was not leviable on the "conceptual value" but on the normal price charged 
859 
H 
860 
SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R. 
A or chargeable by the assessee. 1862-B-C) 
Union of India and Ors. v. Bombay Tyre International ltd., AIR (1984) 
SC 420 and Hindustan Polymers v. C.C.E. (1989) 43 ELT 165, relied on. 
1.2. On facts, the appellant had cleared the pipes fitted with the sockets 
B and it had charged its customers for the pipes fitted with the sockets. It has 
been concurrently found by the Commissioner as well as by the Tribunal that 
the sockets were required for joining the pipes to each other. In the 
circumstances, the functional test stood fully satisfied. Sockets not only 
contributed to the functioning of the pipes, it constituted a part of m.s./g.i. 
pipes. The customer was charged with the price of the socket when the 
C appellant sold the m.sJg.i. pipes with the sockets. Hence, the department was 
right in including th.e cost of the sockets in the assessable value of m.sJg.i. 
pipes. (862-C-D; G; 863-B-C) 
Commissioner of Central Excise v. Akay Cosmetics Pvt. Ltd, (2005) 182 
D EL T 294 para 45, relied on. 
Chambers Science and Technology Dictionary, referred to. 
2. Similary, service charges incurred by the appellant were inculdible 
in the assessable value of m.s./g.i. pipes. Service charges were paid for fitting 
E the sockets to m.s./g.i. pipes. Deduction of service charges of the nature 
indicated in the case does not fall within the deduction contemplated by section 
4(4)(d)(ii). They are not in the nature of trade discount. In the circumstances, 
the department was right in including the said service charges in the 
assessable value of m.s./g.i. pipes. (863-C-E] 
p 
Coromandel Fertilisers ltd v. Union of India and Ors., (1984) 17 EL T 
607, relied on 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2560 of2005. 
From th«:'. Judgment and Order dated 24.12.2004 of the Customs, Excise 
G and Gold (Control) Appellate Tribunal, New Delhi in F.O. No. 41/2005-NB(A) 
in A. No. E/2475 of2004-NB(A). 
J. Vellapally, Pradeep Aggarwal, Ragevesh Singh for Sushi! Kr. Jain and 
Ms. Pratibha Jain with him for the Appellant. 
H 
G.E. Vahanvati, Solicitor General, Rajeev Dutta, T.A. Khan, Rupesh 
SIDDARTHA TUBES LTD. v. COMMR. OF CENTRAL EXCISE [KAPADIA] 
861 
Kumar and P. Parmeswaran with them for the Respondent. 
A 
The Judgment of the Court was delivered by 
KAPADIA, J. This civil appeal under section 35-L (b) of the Central 
Excise Act, 1944 (hereinafter referred to as "the Act") is a sequel to civil 
appeal nos.4247-4248 of2000, hence, it is not required to restate the facts of B 
the case. 
In this civil appeal, a short question which arises 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. 
c 
The appellant herein had filed
Excerpt shown. Read the full judgment & AI analysis in Lexace.