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TMI Blog2015 (12) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the assessee alleging that it had not declared correct value of motorcycles in the price lists and that evasion of duty had taken place. The period covered by the said notice was 1985-86 to 1990-91. The precise allegation in the Show Cause Notice was that the assessee was taking a deposit of Rs. 500 per motorcycle at the time of booking of the motorcycle from the customers and this deposit was an additional consideration. The assessee replied to the said Show Cause Notice taking the plea that the said deposit had no relevance with the cost of the motorcycle. It, however, was not accepted by the Commissioner who passed the Order-in-Original whereby he included the fact of deposit of Rs. 500 to the price of the motorcycle and thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduce the liability under the said head. That, the said schedule 4 indicated not only liquidation of liabilities under the head "customers advances" by utilization of income on investments from such advances, they also indicated flowback of the benefits from the customers to the assessee. Moreover, the income from such investments was shown under the head "Sales & Other Income". The said "Other Income" included interest on deposits, profit on sale of units and income from units (schedule 10). Even the Report of the Directors under the head "Financial Reports" show that the profits of the company have been based on implication of Sales with Other Incomes. For example, for the year 1985-86, Sales & Other Incomes were of Rs. 49.20 crore(roun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent and / or the interest earned thereon have been used in the working capital and/or whether it has the effect of reducing the price of the motorcycle. The Tribunal to do decide on the material which was placed before the Commissioner and not to allow any additional documents/ materials to be filed before it. None of our observations made herein shall bind the Tribunal to which this case is remitted." After remand, the Commissioner once again reiterated the conclusion of his earlier order which compelled the assessee to approach the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'Tribunal') again challenging the order of the Commissioner. The finding of the Commissioner was that the huge amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is despite the rise of the sale price of a motorcycle from about Rs. 10,000 to about Rs. 19,000 during the relevant period. The year to year position is also not any different. The price was revised upwards by about Rs. 900 in 1986-87; but its effect was entirely negative on the bottom line. From a profit of about Rs. 184 in 1985-86 per motorcycle, there was a loss of about Rs. 460 per motorcycle in 1986-87. An upward price revision of over Rs. 1600/- in 1989-90 only helped reduce the loss by Rs. 587 and could not yield a positive margin. From these, it is clear that company did not follow a cost-plus profit approach while pricing the motorcycles. This also confirms the submission of the learned Senior Counsel that the prices were market ..... X X X X Extracts X X X X X X X X Extracts X X X X
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