JUDGMENT

These appeals arise out of and directed against the common appellate order dated 21-8-1990 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (Tribunal for short) in Appeals Nos. ED/ SB/T945/80A and ED/SB/T/ 586/81A. By the same order another appeal of the appellant was also disposed of but that matter is not carried up in appeal here.

2. The appellant, M/s. Texmaco Ltd., pursuant to contracts entered into in this behalf with the Railway Administration fabricated and delivered to the Railways wagon-bodies mounted on "wheel-sets" supplied by the Railways. The invoices raised by the appellant respecting these wagons reflected only the price of the wagon-bodies without including the value of the "wheel-sets" on which the wagon-bodies were mounted. The goods were cleared for purposes of Excise Duties on such invoice-value. The Revenue raised demand for recovery of short-levy and sought to recover the unpaid duty on the value of the "wheel-sets" also. This claim for recovery of the short-levy having been adjudicated against the appellant, an appeal was taken before the Tribunal.

3. Before the Tribunal, it would appear, two contentions were raised: First that the goods manufactured by the appellant were only the wagon-bodies mounted on the "wheel-sets" supplied by the Railway Administration and that, therefore, the assessable value could only be the value of the wagon-bodies excluding the "wheel-sets" supplied by the Railways and, secondly, that at all events the value in excess of the Invoice value which represented the price of the wagon-bodies was exempt from levy of duty under the Exemption Notification No. 120 / 75-CE dated 30th April, 1975 issued under Rule 8 of the Central Excise Rules, 1944. What is implicit in the second contention is that, but for the said Notification No. 120/75-CE dated 30-4-1975, the assessable value would otherwise require the exclusion in it the value of the "wheel-gets" also on the premise that the "wheel-sets" became an integral part of the wagons, even though the "wheel-sets" had been supplied free of cost by the Railways themselves. The Notification No. 120/ 75-CE exempted "so much of the duty of excise.......... as is in excess of the duty calculated on the basis of invoice prices."

4. On the first contention that the assessable-value of the goods could not include the "wheel-sets" which were not fabricated or manufactured by the appellant, the Tribunal, rejecting the contention said:

"On going through the facts and in view of the, clear findings given by the lower authorities that no wagon is complete without the wheels, what has been cleared and removed by the appellants is the wagon mounted on wheel sets and not the wagon body alone.....

On the issue of determination of assessable value, the SC has held that for the purpose of levy of excise duty, the value of the article is the full intrinsic value of the article inclusive of the cost of the materials and components supplied free by the customer and irrespective of the fact that no expenditure was incurred by the manufacturer on such components."

No fault can be found with this reasoning of the Tribunal. Indeed, considerations of ownership of the goods are extraneous to levy of duties of excise which are imposts on manufacture.

5. The second contention on which Dr. Pal laid particular emphasis, indeed, assumes the correctness of the first proposition and claims exemption on the strength of the Notification No. 120/ 75-CE. That Notification says:

"The Central Government has exempted goods falling under Item No. 68 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), cleared from the factory of manufacture, on sale from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the invoice price (excluding duty and local taxes, if any, included in such price) charged by the manufacturer for the sale of such goods:

Provided that the aforesaid exemption shall