HERO HONDA MOTOCORP LTD. Vs. CCE

JUDGEMENT

(1.) AS all the appeals involved the same issue, all are being disposed of by a common order. However for the sake of reference, facts, as available in appeal No. E/2984/2010 are being referred to.

(2.) AS a result of audit objection, Revenue entertained a view that the noticee was receiving additional consideration over and above the price of their finished goods from the dealers, which additional consideration is required to be added in the assessable value of their final product. The said additional consideration was from the dealers, which was being received by them on account of dealers' staff training. Further the appellants have floated a passport programme under which buyers/owners of Hero Honda Motor Cycle were entitled to become the Member of scheme on payment of sum of Rs. 95/ - per customer, which was being recovered from the dealers. In terms of the said scheme, the passport holders are entitled to free accidental insurance cover for one year worth Rs. 1 lakhs, invitation to events, musical nights, carnivals, monthly news letter of the company and information on motor cycle maintenance, accumulation of points on purchase of spares and service of motor cycle. Further the appellant was also recovering amounts from their dealers by issuing a debit note in respect of the expenses incurred with the activity of sending birthday cards and marriage anniversary.

(3.) DURING the course of adjudication, the appellant took a categorical stand that they are manufacturing and selling motor cycle from their Gurgaon factory on the transaction value entered into by them with the dealers, thus satisfying all the ingredients of Section 4 of the Central Excise Act. All the three schemes i.e. dealer staff training, passport programme as also birthday and marriage anniversary cards scheme are being handled from their head office and by no stretch of imagination, it can be held that such receipts are in connection with the motor cycles sold from their Gurgaon factory when admittedly they have other factories also located at different places. They also contended that the expenses incurred by them on all the three schemes are much more than the amounts so received. The demand was also challenged on the point of limitation by drawing the attention of the Adjudicating Authority to the fact that all the three schemes were in the knowledge of the Revenue as is clear from the correspondence exchanged by the appellant with their Jurisdictional Central Excise Authorities as is clear from the fact that number of audits were conducted during the relevant period.