HERO HONDA MOTORS LIMITED Vs. C.C.E.

JUDGEMENT

(1.) THE appellant M/s Hero Honda Motors Ltd. started manufacturing motor cycles in 1985. The said motor cycles were liable to central excise duty on ad valorem basis. Accordingly, they filed price lists from time to time before the jurisdictional Central Excise authorities. The prices declared were the sale prices of the motor cycles. The declared prices were approved and the appellant removed motor cycles from their factory after assessing them to duty based on the approved prices.

(2.) IN July, 1991, a show cause notice was issued to the appellant by the Collector, Central Excise, New Delhi alleging that the appellant had not declared the true and correct value of motor cycles in the price lists and that evasion of duty had taken place. The period covered by the notice was 1985 -86 to 1990 -91.

(3.) THE ground for alleging short -levy was that the appellant was taking a deposit of Rs. 500 per motor cycle at the time customers booked motor cycles and this deposit was an additional (to the sale price) consideration and that suitable addition was required to be made to the sale price to arrive at the assessable value. The case was adjudicated in June 1997 and Commissioner of Central Excise confirmed a duty demand of over Rs. 2 crores. Penalty of Rs. 50 lakhs was also imposed on the appellant manufacturer. That decision was appealed against to the Tribunal as well as the Hon'ble Supreme Court. The matter is now before us upon remand by the Hon'ble Supreme Court vide its order of April, 2005.