Case: Burn Standard Company Ltd. And Anr Vs. Union Of India And Others

1. M/s. Burn Standard Company Limited, the appellant before us, is one of the leading manufacturer of wagons. The wagonsand produced by the appellant are primarily supplied to the Railway Board. The wagons are manufactured in accordance with the specifications terms and conditions contained in the agreements entered between the appellant and the Railway Board from time to time. It is the admitted case of the parties that the Railway Board supplies wheel-sets, axle boxes and various other finished components of wagons to the appellant which are termed asThese items are not manufactured by the appellant. The readymadeare made available to the appellant by the Railway Board without charging any price. These items are fitted in the wagons manufactured by the appellant and are ultimately supplied to the Railway Board. The invoice-value of the wagon charged by the appellant from the Railway Board does not include the value of the

Court's reasoning:
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 measure by reference to which the duty of excise is to be assessed. The duty of excise is linked and chargeable with reference to the value of the excisable goods and the value is further defined in express terms by the said Section. In every case the fundamental criterion for computing the value of an excisable article is the normal price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the manufacturer. It is not disputed that the appellants are manufacturers of wagons. What comes down from the assembly-line of thefactory is a complete wagon and as such the appellant being manufacturer of wagons, is liable to pay duty of excise on the value of a complete wagon. Thelike wheel-sets etc. in the process of manufacturing become part of the complete wagon and loose their identity. 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 calledit is liable to pay duty of excise on the normal value of the wagon.We, therefore, cannot accept the contention of the learned counsel for the appellant that the value of theshould not bein the assessable value of the wagons manufactured by the appellant.