Customs, Excise and Gold Tribunal Bangalore Tata Telecom Ltd. vs Commissioner Of Central Excise on 13 February, 2003 Equivalent citations: 2003(161)ELT581(TRIBANG) ORDER C.N.B. Nair, Member (T) 1. The appellant is engaged in the manufacture of electronic push button telephones. The dispute in the present case is regarding 1 + 1 system of telephones. This system consists of two units, namely, Secretary Station and Executive Station which can be mutually interchanged. The system has features of call transfer facility, secrecy and consultation in addition to working as ordinary telephone. The system is supplied along with a Power Supply Unit (PSU) which is commonly known in the market as AC adaptor, battery eliminator etc. The dispute is as to whether the cost of AC adaptor would form part of the assessable value of 1 + 1 system of telephones. 2. The appellant contends that PSU is not a part of the phone system and that it is supplied along with the telephone only for the convenience of the customers and that the value of such accessories is not to form part of the assessable value of telephones. As against this, the Revenue would contend that AC Adaptor is an essential item for the successful functioning of the 1 + 1 system of telephones. It is pointed out that in the absence of AC adapter the two phones forming the system would only work as ordinary telephones and that additional features like call transfer facility and secrecy and consultation are not possible without AC adaptor. 3. During the hearing of the case the learned Counsel appearing on behalf of the appellant has submitted that it is wellsettled that accessories are separate from the goods of which they form accessories and that the value of accessories cannot form part of the assessable value of the goods of which they are accessories. Appellants have relied on several decisions of the Tribunal and Supreme Court in support of their contention that the value of boughtout accessories, even though supplied along with the goods, cannot form part of assessable value of the goods. It is pointed out that in CCE, Meerut v. Fuse Base Eltoro Ltd. 2000 (116) E.L.T. 279, it was held that value of contact voltage stabilizers, Screen, External Speaker etc. cannot form part of assessable valile of video projector. Similarly, in Manohar Brothers (Capacitors) (P) Ltd. v. CCE, Mumbai 1999 (107) E.L.T. 813, the Tribunal had held that lightening arrester, CT, RVT etc. supplied along with capacitor cannot be included in the assessable value of the capacitor. Learned Counsel of the appellant pointed out that the decision in 1999 (107) E.L.T. 813 was rendered after taking into account the decision of the Apex Court in the case of PS1 Data Systems v. CCE 1997 (89) E.L.T. 3(SC) and the decision in the case of ORG Systems v. Collector 1998 (102) E.L.T. 3 (S.C.). As against this the Learned SDR has relied on decision of the Tribunal in the case of Nichrome Metal Works v. CCE, Pune 1996 (88) E.L.T. 448, wherein the Tribunal held as under: "With regard to boughtout items, if these are supplied along with the machines, as its part and parcel, then cost of such boughtout items would also form part of the assessable value of the goods and if it is only a trading activity, it won't." 4. From a perusal of the case law relied on by both sides it would appear only values of items constituting integral part of the goods under assessment can form part of the assessable value of the goods and not as accessories of the goods under assessment. Accessories, of course, promote the convenience and effective utilization of the machine. Nevertheless, they are separate from the machine itself. In fact, AC adapter is a common accessory used along with many electrical equipments. That way it is valuable for many machines. It promotes better or convenient utilization of the machines but is not a part of any particular machine. It combines with many machine but is not an integral part of any. In these facts and circumstances, we are of the view that the appellant's case is covered in their favour by the decision of this Tribunal in the case of Manohar Brothers (Capacitors) (P) Ltd. v. CCE, Mumbai 1999 (107) E.L.T. 813. 5. In view of what is stated above, the appeal is allowed with consequential relief, if any, to the appellants.