2014 (7) TMI 1183 - AT - Central Excise

Assessable value - Whether the technical service fee should be added to the price declared in the pricelists and consequently be included in the assessable value for assessment purposes? - demand pertaining to 4 pricelists effective for the period 30-12-1983 to 7-4-1985 - Held that - We note that the facts in the above case laws cases are at variance with the present case at hand. It was held in the relied upon cases that the completion of the assessment memorandum in the monthly RT-12 Returns is more or less an arithmetical check. Hence, the enquiry under Rule 173I cannot be extended to enquiries concerning valuation or classification. We are afraid that these judgments have been quoted out of context and are misplaced. In the case of appellants, it is not the Superintendent who sought reopening of pricelists. It is clear that the show cause notice issued to the appellants by Assistant Commissioner was a comprehensive one which sought to revise the pricelists and thereafter only the RT-12 assessments would be finalized under Rule 173I. It is a well settled law that provisional assessments are provisional for all purposes. Once, the basis of wholesale price declared in the pricelists have been challenged in the show cause notice, there would be no bar to finalize the RT 12 assessment in accordance with the revised pricelists. We reject the contention of the appellant. We hold that the Commissioner has correctly ordered to finalize all the pricelists including the revision of prices in pricelists approved earlier which results in confirmation of the entire demand for the period 30-12-1983 to 28-2-1986. Deduction on account of surcharge on the additional sales tax on the revised prices - if prices are revised as per (i), is to be allowed for arriving at the assessable value for calculation of duty - Held that - The appellants are not contending that they have paid the surcharge on the additional sales tax. Although, the appellants have already deposited an amount of ₹ 6,96,30,974/- as Central Excise duty, they have not produced any evidence regarding payment of surcharge on additional sales tax for the period 30-12-1983 to 28-12-1986. Therefore, the benefit of deduction on this count from the assessable value cannot be given.

Summary

Issues Involved:

1. Inclusion of technical service fee in the assessable value.
2. Validity of demand pertaining to price lists approved from 30-12-1983 to 7-4-1985.
3. Deduction on account of surcharge on additional sales tax on revised prices.

Issue-wise Detailed Analysis:

1. Inclusion of Technical Service Fee in the Assessable Value:

The appellants argued that technical service charges were not related to the manufacture or marketability of goods and were optional, citing the Supreme Court decision in A.K. Roy v. Voltas Ltd. and the Bombay High Court decision in their own case. However, the tribunal found that these charges were compulsorily recovered from dealers without providing corresponding services, as evidenced by the lack of invoices or documents showing services rendered. The tribunal noted that the appellants segregated these charges from the declared price and recovered them through debit notes, which was not disclosed to the department. Therefore, it was held that the technical service fee must be added to the prices declared in the price lists to arrive at the assessable value, as enumerated in Annexure "X" to the show cause notice.

2. Validity of Demand Pertaining to Price Lists Approved from 30-12-1983 to 7-4-1985:

The appellants contended that the four price lists approved finally could not be revised without issuing a show cause notice under Section 11A. The tribunal rejected this argument, stating that the show cause notice dated 28-10-1994 clearly proposed to revise the price lists effective for the entire period from 30-12-1983 to 28-2-1986, including those already approved. The tribunal emphasized that the RT-12 assessments were provisional for all price lists because the appellants failed to produce sale invoices for verification. Thus, the tribunal concluded that the Commissioner correctly ordered the finalization of all price lists, including revising the prices in the previously approved price lists, resulting in the confirmation of the entire demand for the period.

3. Deduction on Account of Surcharge on Additional Sales Tax on Revised Prices:

The appellants sought a deduction for the additional sales tax surcharge on the revised prices. The tribunal referred to the Supreme Court case of Akay Cosmetics Pvt. Ltd., which held that deductions could be granted based on proof of actual payment of tax. Since the appellants did not provide evidence of paying the surcharge on additional sales tax for the period, the tribunal denied the benefit of this deduction from the assessable value.

Conclusion:

The tribunal dismissed the appeal, upholding the inclusion of technical service fees in the assessable value, the validity of revising approved price lists, and denying the deduction for the additional sales tax surcharge due to lack of proof. The issue of advertisement expenses was settled in the appellants' favor.