TEXMACO LTD. vs COLLECTOR OF CENTRAL EXCISE, CALCUTTA

The Supreme Court held that under Rule 8 of the Central Excise Rules, 1944, and Notification No. 120/75 CE, the assessable value for excise duty should not include the value of 'wheel sets' supplied by the Railways, as the invoice only reflected the price of the wagon-bodies. The Court found that the Tribunal misinterpreted the exemption notification, which was intended to relieve manufacturers from paying duty on components not supplied by them. Consequently, the Court allowed the appeals, ruling that the manufacturer should not be liable for duty on the value exceeding the invoice price.