9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 940 - AT - Central ExciseValuation - inclusion of the cost of Pre-Delivery Inspection charges and After Sales Services charges, overriding commission paid to dealers on sale to canteen store-departm, Demo Cars, Cost of display kits collected from dealer through debit note, Recovery of incentive trip cost from dealers and profit margin at HMP - Incorrect availment of Cenvat credit on fabricated paint shop structural - Finalization of provisional assessment - Held that - Revenue has filed the present appeals on the inclusion of PDI/ASS charges solely on the basis of said Board s circulars dt. 1.7.2002 and 12.12.2002. Since the Hon ble Bombay High Court has quashed the said circulars, the revenue s plea for inclusion of PDI and ASS charges is not justified and beyond the scope of law. Further, we find that the co-ordinate Benches of the Tribunal at Mumbai, Delhi and Bangalore on identical issue of PDI pertaining to other Automobile companies followed the Hon ble High Court order and allowed the appeal in favour of the assessee and rejected Revenue s appeals. - PDI/ASS charges are not includible in the transaction value of cars cleared by the assessee. Accordingly, we uphold the Commissioner (Appeals) orders to the extent of non-inclusion of PDI charges/ASS charges. Consequently, we set aside orders passed by Commissioner, LTU confirming the demand on PDI and also set aside the penalties and allow the assessee s appeals. As regards the inclusion of overriding commission paid to dealers on the sale of cars to Defence personnel through Canteen Stores Department (CSD), we find the cars were directly sold by the assessee to the CSD and not through the dealers. LAA clearly brought out that the amount which was paid to dealers is nothing but towards payment for providing after sales services of the cars sold to the Defence personnel directly. Revenue s plea is that it is a commission paid to be included as per Section 4 is not justified. Accordingly, the LAA order on this account is liable to be upheld. As regards non-inclusion of Display Kits and Recovery of Incentive Trips from the dealers, we find that both the transactions are related to post-sale transactions. Therefore, any recovery from the dealer on account of cost of display kits or recovery of expenses for the incentive trips does not form part of the assessable value. As regards the issue of non-inclusion of Profit Margin to Hyundai Motors Plaza (HMP), these are plazas/retail show rooms called as Hyundai Motors Plaza where the cars are sold directly to the customers on retail sale. The department had initially alleged that as per amendment of definition of place of removal , the depot becomes place of removal for delivery and sale and the price at which the goods are sold at the depot should be taken as the price. In this regard, we find that these plazas are not depot and there is no sale to whole sale dealers. Since in this case, there is no transaction of whole sale transaction to dealers but it is only a retail sale transaction and the term place of removal is applicable only in a case where the goods are sold in a wholesale transaction. - profit margin paid at the HMP is not includible in the assessable value of cars and LAA order on this account is liable to be upheld. Assessee sell cars through their dealer network and adopt two different price viz. for normal cars and for demo cars by way of giving special discounts. Adjudicating authority discussed the issue in detail in his findings and disallowed the discount given on the Demo cars and relied the Board s circular issued in F.No.6/40/2002-CX.1 dt.1.4.2003 and re-determined the price payable on demo cars as per the price of normal cars cleared to the dealers. In this regard, we find that the issue of valuation on Demo Cars stands settled by this very Tribunal Bench orders in the case of Ford India Ltd. Vs CCE Chennai reported in 2011 (7) TMI 1044 - CESTAT CHENNAI and also in the case of Royal Enfield Vs CCE Chennai - 2012 (9) TMI 456 - CESTAT, CHENNAI wherein the Division Bench of this Tribunal had consistently upheld the demand of differential duty on Demo Cars and rejected the assessee s appeals except waiving the penalties. - we uphold the impugned Order-in-Appeal No.41/2004 dt. 28.7.2004 in respect of value of demo cars and reject the assessee s appeal to that extent. Consequently, we set aside that portion of the orders of LAA in respect of OIA Nos.59/08 dt. 30.3.09; OIA No.64/08 dt. 30.3.09, OIA No.59/09 dt. 3.11.2009 and OIA No.60/09 dt. 3.11.09 relating to Demo cars and uphold the respective adjudication orders on the issue of valuation of demo cars and allow the Revenue appeals on this count. As regards the last issue of denial of cenvat credit on the capital goods viz. steel structuals used in the fabricated shops, we find that there is no dispute on the fact that the structurals are used in paint complex which is capital goods used in the manufacture of motor vehicles. - assessee is eligible for capital goods credit on the structural used in paint complex. The revenue relying on the LB decision in the case of Vandana Global Ltd. (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ) and Apex Court decision in the case of Triveni Engineering & Industries Ltd. (2000 (8) TMI 86 - SUPREME COURT OF INDIA) is not relevant in view of the jurisdictional High Court of Madras decision and other High Court orders - Decided partly in favour of assessee.
Issues Involved:
1. Non-inclusion of cost of Pre-Delivery Inspection (PDI) and After Sales Service (ASS) in the assessable value. 2. Non-inclusion of overriding commission paid to dealers on sale to canteen store-department (CSD). 3. Valuation of Demo Cars. 4. Cost of display kits collected from dealer through debit note. 5. Recovery of incentive trip cost from dealers. 6. Non-inclusion of profit margin at Hyundai Motor Plaza (HMP). 7. Incorrect availment of Cenvat credit on fabricated paint shop structural. Issue-wise Detailed Analysis: 1. Non-inclusion of cost of Pre-Delivery Inspection (PDI) and After Sales Service (ASS) in the assessable value: The adjudicating authority included PDI and ASS charges in the assessable value, but the lower appellate authority (LAA) set aside this inclusion. The Bombay High Court in Tata Motors Ltd. vs. UOI quashed the Board's circulars that mandated inclusion of these charges, ruling that PDI and ASS charges are not part of the assessable value if they are not charged by the manufacturer to the dealer. This decision was followed by several Tribunal decisions, including Toyota Kirloskar Motors Pvt. Ltd. vs. CCE & ST Bangalore and CCE & Cus Aurangabad vs. Bajaj Auto Ltd. Consequently, PDI and ASS charges are not includible in the transaction value of cars cleared by the assessee. 2. Non-inclusion of overriding commission paid to dealers on sale to canteen store-department (CSD): The LAA found that the amount paid to dealers was for after-sales services for cars sold directly to CSD and not a commission. Thus, it should not be included in the assessable value. The Tribunal upheld this view, rejecting the Revenue's appeal. 3. Valuation of Demo Cars: The adjudicating authority disallowed discounts on demo cars, equating their value to normal cars based on the Board's circular. This view was upheld by the Tribunal in Royal Enfield vs. CCE Chennai and Ford India Pvt. Ltd. vs. CCE Chennai, which ruled that demo cars should be valued at the same price as normal cars. The Tribunal upheld the adjudicating authority's decision to reject the transaction value of demo cars and redetermine their value based on normal cars. 4. Cost of display kits collected from dealer through debit note: The LAA ruled that the cost of display kits, being a post-sale transaction, should not be included in the assessable value. This was supported by Tribunal decisions in Kinetic Engg. Ltd. vs. CCE Pune-II and others. The Tribunal upheld the LAA's decision. 5. Recovery of incentive trip cost from dealers: The LAA determined that the recovery of incentive trip costs from dealers is a post-sale transaction and should not be included in the assessable value. This decision was upheld by the Tribunal, citing similar rulings in previous cases. 6. Non-inclusion of profit margin at Hyundai Motor Plaza (HMP): The LAA found that the profit margin at HMP, a retail showroom, should not be included in the assessable value as it pertains to retail sales, not wholesale transactions. The Tribunal upheld this decision, referencing Mahavir Spinning Mills Ltd. vs. CCE Jalandhar, where the Supreme Court dismissed the Revenue's appeal on similar grounds. 7. Incorrect availment of Cenvat credit on fabricated paint shop structural: The LAA allowed Cenvat credit on structural used in the paint shop, classifying them as capital goods. This was supported by High Court decisions in CCE Trichy vs. India Cements and others. The Tribunal upheld the LAA's decision, dismissing the Revenue's reliance on Vandana Global Ltd. and Triveni Engineering & Indus. Ltd. Final Disposition: - The Tribunal upheld the LAA's orders on issues related to PDI/ASS charges, overriding commission on CSD sales, cost of display kits, incentive trip costs, profit margin at HMP, and Cenvat credit on structurals. - The Tribunal upheld the adjudicating authority's decision on the valuation of demo cars, rejecting the assessee's appeal on this issue. - The Tribunal set aside the orders of the LAA on demo cars for subsequent periods, allowing the Revenue's appeals in part. - The Tribunal allowed the assessee's appeals related to PDI charges for subsequent periods. All ten appeals were disposed of according to these terms.
|
