RESPONDENT: COLLECTOR OF CENTRAL EXCISE, VADODARA DATE OF JUDGMENT: 21/07/1998 SUJATA V. MANOHAR, K. VENKATASWAMI ACT: HEADNOTE: JUDGMENT: J U D G E M E N T K. VENKATASWAMI, J. These two appeals arise out of a common order dated 5.7.94 of the Customs Excise & Gold (Control) Appellate Tribunal, New Delhi (hereinafter called "the Tribunal"). The issues that arise out of the order of the Tribunal under appeal are no longer res integra. The decision of this Court in PSI Data Systems Ltd. Vs. Collector of Central Excise [1997 (89) E.L.T. 3 (S.C.)] settles the controversial issues raised in these appeals. Briefly stated the facts are the following : The appellant is engaged in the manufacture of Computers falling under Tariff Item 33DD from May, 1982 when they got the necessary licence. Prior to May, 1982 the appellant got the Computers manufactured by (a) M/s Orbit Electronics (for short 'Orbit') by supplying raw materials and also by supplying specifications and designs. The computers so manufactured by the appellant, as stated above, as well as those manufactured by the appellant after May, 1982 were marketed by M/s Adprint Services Limited, baroda (for short 'Adprint'). At this stage, it is necessary to make it clear that the Revenue seriously claimed all through that DSI and Orbit were the dummy units of the appellant. The Tribunal, as final fact finding authority, has held that they ere not dummy units. However, the contention of the appellant that Adprint is an independent concern, was not accepted by the Tribunal and the Tribunal has given a clear finding that Adprint is a dummy unit of the appellant. We proceed on the basis of these findings given by the Tribunal as they are binding on the parties. The principal issues in controversy are: (a) whether the Computers manufactured and cleared by the DSI and Orbit are liable to be treated as the Computers manufactured and cleared by the appellant and, therefore, liable for excise duty at the hands of the Appellant; (b) whether the value of peripheral devices and/or Computer systems sold by Adprint along with Computers and includible in the assessable value of the Computer; and (c) whether the amount or value of the service charges recovered by the appellant under service contracts can be included in the assessable value of the Computer. The other subsidiary issues are: (1) in the event of this Court coming to the conclusion that the peripheral devices and the amount of service charges are includible in the assessable value of the Computer, then what is the correct amount that would be liable to be so included and (2) whether the penalty initially levied in a sum of Rs. 25 lacs and ultimately reduced by the Tribunal to Rs. 10 lacs, is sustainable in the facts and circumstances of the case. The authorities, overruling the objections raised by the appellant, held that the Computers manufactured by DSI and Orbit must be deemed to have been manufactured by the appellant and as such liable for excise duty. It was also held that the value of peripherals and systems software supplied is includible in the value of the Computers. Likewise, the Revenue held that nondisclosure of the values of service charges, peripherals and systems software attracts levy of penalty. Accordingly the demand was raised against the appellant in a sum of Rs. 3, 32, 96,010.58 and a penalty of Rs. 25 lacs was also levied. Before the Tribunal, the appellant got some relief on duty part and penalty was reduced from Rs. 25 lacs to Rs. 10 lacs. The Tribunal, after analysing the facts, held that the supply of raw materials alone does not make the appellant as manufacturer of the Computers factually manufactured by DSI and Orbit. However, the Tribunal was of the view that the supply of specifications and designs was actually at par with the supply of specific designs of a tailor made item and hence will constitute manufacture. On that basis, the Tribunal held that the case of supply of specifications and designs for Computers will amount to manufacture and price charged therefore shall be includible in the assessable value. Similarly, the Tribunal held that the vale of peripherals at the time of supply of computers would make