1987 (4) TMI 277 - AT - Central Excise

Summary

Issues:
Whether the amount of Rs. 1,000 realized by the appellants at the time of clearance of motor vehicles should be treated as part of the assessable value or not.

Analysis:
The appeal in question involved a dispute regarding the treatment of an additional amount of Rs. 1,000 collected by the appellants at the time of clearance of motor vehicles. The appellants, manufacturers of motor vehicles, had an agreement with D.G.S. & D. for the sale of vehicles to Defence and non-defence civilian indentors. The appellants raised the price by Rs. 1,000 for civilian indentors to cover after-sale service, which was then transferred to the dealers. The Central Excise Department revised the assessable value by adding Rs. 1,000 for vehicles supplied to civilian indentors, which was contested in the appeal.

The appellants argued that the extra Rs. 1,000 collected was not part of the price but intended for the dealers, and hence should not be included in the assessable value under Section 4 of the Central Excises and Salt Act. However, the Department contended that as per Section 4(l)(a), the price at which goods are sold by the assessee to the buyer constitutes the sole consideration of the price, including any amounts collected at the time and place of removal of goods.

Upon reviewing the facts and documents, the Tribunal observed that the invoices to civilian indentors included the extra Rs. 1,000 as a separate item, and credit notes were issued to dealers for the same amount. The Tribunal concluded that the amount received by the appellants at the time and place of sale did include the Rs. 1,000, regardless of its subsequent transfer to the dealers. The Tribunal held that Section 4 clearly defines items deductible from the price, and since the amount was part of the consideration received by the appellants, it should be included in the assessable value.

In light of the above analysis, the Tribunal upheld the orders of the authorities below, affirming that the amount of Rs. 1,000 collected by the appellants should be treated as part of the assessable value. Consequently, the appeal was rejected.