1998 (3) TMI 212 - AT - Central Excise

Summary

Issues:
1. Allegation of short payment of excise duty on motor vehicles due to dealer's mark up not included in assessable value.
2. Invocation of extended period of limitation for suppression of material facts.
3. Challenge against Order-in-Original confirming duty demand and imposing penalty.

Analysis:

Issue 1: The appellant, a motor vehicle manufacturer, faced allegations of short payment of excise duty due to not including dealer's mark up in the assessable value. The appellant argued that the mark up was for dealer-provided services like pre-delivery inspection and warranty obligations, not trade discount. The appellant contended that the mark up should not be added to the assessable value, citing a Tribunal decision and a Supreme Court ruling. The Departmental Representative argued that the mark up enhanced marketability and should be included. The Tribunal found discrepancies in the appellant's submissions but relied on precedents to rule that the mark up should not be part of the assessable value.

Issue 2: The Department invoked the extended period of limitation, alleging the appellant suppressed material facts to evade duty payment. The appellant denied deliberate misstatement or intent to evade duty, claiming the mark up was for customer benefit. The Tribunal noted the conflicting positions taken by the appellant in the show cause notice reply and the hearing. Despite this, the Tribunal applied a Supreme Court decision to determine that the mark up did not enhance only the manufacturer's value but also the dealer's, thus not warranting inclusion in the assessable value.

Issue 3: The Order-in-Original confirmed the duty demand and imposed a penalty on the appellant, along with confiscation of assets redeemable by a fine. The appellant challenged this decision, emphasizing the retail nature of their sales and the deduction allowed by the Tribunal in similar cases. The Tribunal, aligning with previous decisions, ruled in favor of the appellant, holding that the dealer's margin, including mark up for after-sales services, should not be considered part of the assessable value. The appeal was allowed, overturning the Collector's decision.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, legal precedents cited, and the Tribunal's final decision in favor of the appellant.