2010 (2) TMI 1019 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery sought by the appellant for duty demanded by the Commissioner.
2. Inclusion of "Pre-Delivery Inspection" (PDI) charges and "Free-After-Sale service" charges in the assessable value of motor vehicles.
3. Interpretation of the definition of "transaction value" under Section 4(3)(d) of the Central Excise Act.
4. Reference to conflicting decisions of Coordinate Benches and the issue referred to a Larger Bench.
5. Circular issued by CBEC transferring similar pending cases to "call book" due to the reference to a larger bench and pendency of an allied issue before the Supreme Court.

Analysis:
1. The appellant sought waiver of pre-deposit and stay of recovery for duty of over Rs. 21 crores demanded by the Commissioner for the period from December 2003 to November 2008. The charges in question, i.e., "Pre-Delivery Inspection" (PDI) charges and "Free-After-Sale service" charges, were not included in the assessable value of motor vehicles sold by the appellant to their dealers during this period.

2. The Revenue argued that these charges, paid by the buyer to third parties on behalf of the assessee, should be included in the assessable value of the vehicles based on the definition of "transaction value" under Section 4(3)(d) of the Central Excise Act. The appellant contested this argument, citing decisions of the Tribunal in favor of similar manufacturers of motor vehicles. The issue was referred to a Larger Bench in the case of Maruti Suzuki Ltd. v. Commissioner of Central Excise, Delhi, regarding the inclusion of PDI charges and After-Sale-Services in the assessable value of motor vehicles.

3. The CBEC issued a circular transferring similar pending cases to "call book" due to the reference to the larger bench and the pendency of an allied issue before the Supreme Court. The appellant requested waiver of pre-deposit and stay of recovery based on this circular, arguing that it would not prejudice the Revenue. The Revenue insisted on pre-deposit to secure the interest of the Revenue under Section 35F of the Central Excise Act.

4. The Tribunal noted that the referring bench had granted waiver of pre-deposit and stay of recovery while referring the issue to a larger bench. Considering the pending issue before the larger bench and the circular transferring cases to "call book," the Tribunal found no prejudice to the Revenue in granting waiver and stay of recovery in favor of the appellant. Consequently, the Tribunal allowed the application by granting waiver and stay of recovery for the duty and interest demanded by the Commissioner.