9911796707
TMI Blog2000 (4) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... les manufactured and sold by the appellants. 2. The facts leading to the present dispute are that the appellants entered into rate contract with DGS D for the supply of motor vehicles. The appellant was required to charge DGS D the lowest wholesale price charged to others. In other words, the price settled was the net dealer's price; however, a mark-up charge of Rs. 1,000/- per vehicle was to be paid by the DGS D in case of supplies to "Civil Indentors". This mark-up charge was a consideration for three after-sales service to be provided by the dealers which the appellant company had arranged for the Government buyers. The amount realised by the appellant company was not retained by it, but was reimbursed to the dealers as a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l before the Tribunal. The appeal was heard by a two Member Bench of the Tribunal which recorded its finding that mark-up charges of Rs. 1,000/- are not required to be added in the assessable value of the vehicles; however, in view of the contrary decisions of the Tribunal in the case of M/s. Premier Automobiles Ltd. v. Collector of Central Excise, Bombay reported in 1988 (36) E.L.T. 157, M/s. Standard Motor Products India Ltd. v. Collector of Central Excise reported in 1989 (41) E.L.T. 646 and M/s. Enfield India Ltd. v. Collector of Central Excise, Madras reported in 1994 (69) E.L.T. 702, in which it was held that mark-up charges form a part of the assessable value, the issue was referred for consideration by a Larger Bench. 3. We have h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -up charges, the buyers shall be provided with the usual free after-sales services. Clause 9 reads as under : "In consideration of the mark-up charges from non-defence indentors as mentioned in clause 6 above, you will put the vehicles in road worthy condition and will also render the usual free service which includes tuning of engine, checking of brakes, lubricants, battery, radiator, wires etc., and effect minor adjustments that may be necessary. The indentor in every case however, will bear the cost of lubricants if added or changed or spare parts, if replacement falls outside warranty terms and the dealer will only absorb the labour involved." Clause 21 provides that in case the contractor reduces the sale price or sells or offers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court has held that the "price of an article is related to its value (using this term in general sense), and into that value have poured several components, including those which have enriched its value and given to the article its marketability in trade. Therefore, the expenses incurred on account of the several factors which have contributed to its value upto the date of sale, which apparently would be the date of delivery, are liable to be included. Consequently, where the sale is effected at the factory gate, expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges......................... for other services after delivery to the buyer, viz. after-sales service and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that that part of the dealer's margin which was referrable to free of cost after-sales service cannot be included in the assessable value, following the Tribunal's decision in the case of Mahindra and Mahindra v. Collector of Central Excise and Maruti Udyog Ltd. v. Collector of Central Excise, Delhi vide Final Orders No. 181-187/98, dated 13-2-1998 wherein it was held that deduction on account of trade discount granted to dealer cannot be reduced in case dealer provides the free after-sales service on his own (not as an agent of the manufacturer. In the present case, however, the issue is whether mark-up charges per vehicle charged by the manufacturer under DGS D rate contract for free after-sales services and continuation of warranty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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