Per Justice U.L. Bhat :

The appeal is directed against the order in appeal No. 08/92 dated 12.12.92 passed by the Collector (Appeals) Bombay confirming the order in original No. 31/91 dated 30.7.91 passed by the Assistant Collector, Central Excise, Goa, approving price list No. 165/90-91 filed by the appellant and given certain deductions in the determination of assessable value.

2. The excisable product manufactured by the appellant is Photo Camera. The dispute in the appeal relates to admissibility to deduction of the cost of Instruction Manual, Freight and Insurance charges.

3. Instruction manual cannot be regarded as a component part of photo camera. So also leather case is not a component part of camera. Even assuming that manual and case are sold with every unit of camera, they cannot be regarded as component parts. Supreme Court in the case of Shriram Bearings Ltd. 1997 (91) ELT 255 (SC) has held that the cost of accessories even fitted to an excisable product at the time of clearance cannot be included in the assessable value of the product as they are not component parts. Hence we hold the deduction of the cost of manual and leather case would be admissible.

4. According to learned Counsel for the appellant, freight and insurance charges have been equalised. The price list did not specifically describe the charges as equalised. The price list was in part-II, on the basis of a contract on purchase order, a copy of which is not before us. Letter dated 18.1.91 by the appellant enclosing the price list stated that the actual freight included the cost of wooden boxes used to stand rough handling in transit as per the requirement of the buyer and the freight charges and packing charges will be nearly 2.5% of the price while the insurance charges will be 0.5% to the total price. The charges for of freight and insurance claimed for deduction in the price list was the nearly 3% of the wholesale price. This letter did not indicate that the charges were equalised. We mention this because in the reply to the show cause notice under the heading "equalised freight and insurance" appellant stated that necessary proof for deduction of equalised freight and insurance is being submitted. The idea of freight and insurance being equalised was not indicated in the letter accompanying the price list. The promised proof was not produced before the original authority. Letter dated 18.9.92 submitted by the learned Counsel for the appellant to the Collector (Appeals) mentioned that a certificate from the Chartered Accountant indicating the percentage of freight and insurance charges was enclosed. The Collector (Appeals) did not make any reference to the certificate of the Chartered Accountant. If deduction of any amount on percentage is claimed in the price list on account of freight and insurance, it would be for the appellant to establish the same. The certificate of Chartered Accountant would be a item of evidence in proof of the quantum claimed deduction of. Since the Collector (Appeals) did not advert to this material, the order, to that extent, cannot stand.

5. While holding that the cost of Instruction Manual and leather case would be admissible for deduction, we set aside the order passed by the Collector (Appeals) and remand the case to the jurisdictional Commissioner (Appeals) to decide the admissibility of the claim for deduction of freight and insurance charges after referring to the certificate of Chartered Accountant and to pass a fresh order after giving appellant an opportunity to hearing. The appeal is thus allowed.