2013 (12) TMI 1038 - AT - Central Excise

Inclusion of After sales services and Pre-delivery inspection in assessable value Revenue was of the view that the assessee derived additional consideration and it should be included in assessable value as per Rule 6 of Valuation rules, 2000 Held that - There is a specific averment of the assessee that the value declared for payment of duty have already included the expenses towards PDI and ASS - The actual reimbursement should have been Rs.1.16 crores and the assessee had reimbursed or paid to the dealer only Rs.90.84 lakhs and duty was demanded on the differential amount - the amount of Rs.90.84 lakhs was included in assessable value - there is no basis that the balance amount was not included in the assessable value the assessee had already included the charges towards PDI and ASS in the assessable value - the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee in Rule 6 of Valuation Rules, 2000, make it clear that the amount should be received by the assessee - there is no material available that the assessee had collected any additional consideration Decided against Revenue.

Summary

Issues:
Assessable value including charges for After Sales Services (ASS) and Pre-delivery Inspection (PDI) under Rule 6 of Valuation Rules, 2000.

Analysis:
1. The case involved the issue of whether charges for ASS and PDI should be included in the assessable value of motor cycles manufactured by the respondents. The Revenue contended that the respondents did not pay duty on PDI and ASS borne by the dealer, resulting in an escape of assessment amounting to Rs. 26,00,935 for the period 2002-03. The Revenue relied on the decision of the Larger Bench in Maruti Suzuki India Ltd. case, upholding the inclusion of such charges in the assessable value.

2. The respondent's counsel argued that PDI and ASS charges were already included in the assessable value, as evident from the adjudication order. The reimbursement to the dealer was based on free coupons submitted by customers to the dealer, and any differential amount was due to the dealer not submitting free coupons to the manufacturer. It was contended that there was no additional consideration flowing from the buyer to the assessee, hence Rule 6 of Valuation Rules did not apply.

3. The Tribunal noted that the respondent had declared the value for duty payment, including expenses towards PDI and ASS, which was not disputed by the original authority. Rule 6 of Valuation Rules mandates the inclusion of additional consideration in the value of goods, but in this case, there was no allegation of the respondent collecting additional consideration from the buyer. The Commissioner (Appeals) found that the charges were already included in the assessable value and no deduction had been claimed by the respondent for the same.

4. The Tribunal upheld the Commissioner (Appeals) findings, stating that the respondent had already included the charges for PDI and ASS in the assessable value. The case law cited by the Revenue did not apply as there was no evidence of additional consideration being collected by the respondent. The Tribunal rejected the appeal filed by the Revenue, concluding that there was no basis to show that the balance amount was not included in the assessable value.

In conclusion, the Tribunal ruled in favor of the respondent, holding that the charges for ASS and PDI were already included in the assessable value, and there was no evidence of additional consideration collected by the respondent. The appeal filed by the Revenue was rejected, affirming the decision of the Commissioner (Appeals).