MAJESTIC AUTO LTD. Vs. CCE, GHAZIABAD

JUDGEMENT

(1.) APPELLANTS are a manufacturer of Motor Cycles. Under the impugned order, it has been held that the cost of '3 Free After Sales Services' and 'Pre Delivery Inspection' (PDI) were liable to be included in the assessable value of the motor cycles. Amount involved was @ Rs. 155/ - per motor cycle. Duty demand worked out @ Rs. 155/ - per motor cycle for the period from August 1998 to June 2000 and penalties have been confirmed under the order impugned. The contention of the appellant before the lower authorities and this Tribunal is that the cost of PDI and Free Services rendered by dealers and the payment made to the dealers for those services cannot form part of the assessable value. They have also submitted that this position remains settled by the decision of the Hon'ble Supreme Court in the case of Philips India Ltd. - : 1997 (91) ELT 540 :, 1998 (74) ECR 722 (SC) and the decisions of the Tribunal in the case of Mahindra & Mahindra Limited and M/s. Maruti Udyog Ltd. - : 1998 (103) ELT 606 :, 1998 (76) ECR 290 (T), which have been confirmed by the Hon'ble Supreme Court [1999 (111) ELT A -126]. They have also pointed out that this position remains confirmed by the CBE & C Circular No. 681/72/2000 - CX dated 12.12.2002.

(2.) IN the present case, while selling the two wheelers, appellant's manufacturer includes Rs. 155/ - per motor cycle towards "PDI services" in the invoice prices. The invoice also mentions that this amount is reimbursable. The arrangement is that these amounts are reimbursed to the dealers, upon receipt of vouchers confirming that '3 Free After Sales Services' and PDI had been carried out by the dealers. The Commissioner rejected the appellant's submission that the issue remains covered by the decisions in Philips India Ltd and Maruti Udyog Ltd. with the observations that Hon'ble Supreme Court, in the case of Bombay Tyre International -, (83) ELT 1986 (SC) :, 1983 ECR 653 D (SC) :, ECR C 659 (SC) had held that after sale services being part of the selling expenses will be includible in the assessable value. Impugned order has also relied on the Hon'ble Supreme Court's decision in the case of Govt. of India v. Madras Tyre Factory - [1995 (77) ELT 433 (SC) :, 1995 (56) ECR 385 (SC)].