1997 (10) TMI 178

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..... k on completion of installation work. 2. The show cause notice dated 15-7-1987 alleged that this security deposit was includible in the assessable value. After hearing the assessees, the Assistant Collector held that these charges were after-sales service charges and therefore not deductible. He ordered addition of the charges to the assessable value. The Collector (Appeals) having upheld the lower order, the present appeal is before us. 3. We have heard Shri P.S. Bedi, Consultant for the appellants and Shri K. Srivastava, SDR for the Revenue. 4. Shri Bedi referred to the judgment of the Tribunal reported in 1992 (58) E.L.T. 90 (Tribunal) in their own case which was followed by the Tribunal in the Final Order No. 3505-3506/96-A, date .....

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..... e components of the normal price and further the deductibility of the components of this collection for determining the assessable value. 6. As the circular above shows, the portion of Rs. 150/- represented the compensation towards Installation and Customer Training. It has been agreed by both the sides that the charges towards Installation and Training are excludible from the normal price. We are therefore to examine only the second issue which is specific compensation towards cost of labour for work done during the warranty period. Shri K. Srivastava placed before us a number of judgments to show that the charges which the appellants incurred during the warranty period were not deductible. The Supreme Court in their judgment in the case .....

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..... bove service schedule for their engines. The dealers would be allowed to charge from the customers a reasonable amount for rendering these services. However, the customers would be free to arrange these services on their own, without involving the dealer. In any case, all such arrangements would be settled by the dealer with the customers and Eicher Tractors Limited will in no way be responsible for any disputes in this connection." 8. What this provision show is that the manufacturers were not responsible for providing free service to the customers even during the first year. The judgments cited above and examined by us relate to warranty charges. Warranty has been defined as an express or implied undertaking on the vendor s part that th .....

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