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TMI Blog1988 (5) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... arranty charges for their T.V. sets from the customers but did not disclose the recovery in the price-lists filed by them. 2A. We have heard both sides and have carefully considered the matter. The appellants resist the demand both on merits as well as on the ground of limitation. They maintain that their declared sale price already included the cost of free warranty service provided by them for the first three months and for the next nine months they had another optional warranty on payment basis. They also assert that the department was all along aware of their paid warranty scheme and, as such, the charge of suppression held against them is not correct. 3. We find from the record that the department received written information from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants furnished statements of total clearances of T.V. sets and thereafter a break-up of the clearances to Govt. agencies against Part II price lists in which no separate warranty charge was recovered. From these statements, the department seems to have drawn the presumption that the warranty charges must have been invariably recovered in respect of the remaining clearances against Part I price-lists. During the hearing before the Collector, the appellants had produced 10 invoices where separate invoices for T.V. sets and the accessories were issued to the customers but there was no mention of recovery of warranty charge therein. The Collector's objection to these invoices is, frankly speaking, not intelligible to us nor is the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove that the warranty charge for the next nine months had been compulsorily collected from every customer. We accept the pleading of the appellant that this charge was an optional one and hence not includible in the assessable value of the T.V. sets since it was clearly for a service rendered some three months after the removal of the set from the factory gate. 6. We agree with the appellants on their plea of limitation also. Since the department initiated the proceedings in the matter twice earlier, once in 1979 and again in 1982, and dropped them, the department cannot justifiably claim that it was unaware of the paid warranty scheme of the appellants. On the matter being dropped by the department twice, the appellants presumed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustry were giving one year initial free warranty. This practice continues even today, when specific rates of duty are in force. This warranty period was common for both colour Television sets and Black & White Television sets. But the Public Sector units like Central Electronics Ltd. and ECIL (ourselves) were giving only 3 months free warranty. The one year warranty given by Private Sector is more in the nature of advertisement for the sale of their product like certain refrigeration companies who in competition are advertising on 7 year warranty while others are giving 5 year warranty. There are a few companies like TELEVIJAY, BINATONE, NELCO who are now giving even two year warranty. This is all done to attract customers. During the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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