Per C.N.B. Nair :

M/s. Motherson Sumi Systems Ltd. is a manufacturer of wiring harnesses. The manufacture is carried out according to specific orders of automotive and air conditioning industry, against specific contracts. In some cases the appellant received certain component parts of wiring harness, free of charge, from their buyers. These components were also incorporated in the wiring harness. In such cases, the value of the free supply component parts were not added to the prices of wiring harnesses while fixing their assessable value and paying excise duty on them. The order impugned in this appeal has demanded duty attributable to the price of such components and has imposed penalties on the manufacturer as well as the officers of the company. The period of duty demand extends from March, 1995 to January, 1997. The show cause notice was issued on 13.3.2000.

2. The law relating to the inclusion of the price of free supply items in the assessable value of goods produced with the free supply materials is well settled, that their value is required to be included. Therefore, that issue is not in contention in the present appeal. The appellants, however, have submitted that the