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TMI Blog2004 (4) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ices while selling the automobiles to retail buyers. The dealership agreement also specified the commission which the dealer shall receive from customers. The dealership agreement also stipulate the services which a dealer shall render to the buyer. Clause 39 under Article 9 (servicing) of the dealership agreement states as under :- "39. PDI and after sales service. The Dealer shall ensure that the pre-delivery inspection and after-sales service for Vehicles are carried out fully and efficiently in accordance with the requirements and policies of the Company established from time to time. In particular the Dealer shall at all times make complete and accurate reports in the form and at the times required by the Company in respect of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged that the PDI charges, collected on or after 1-7-2000, formed the part of 'transaction value' as defined in Section 4(3)(d) of the Central Excise Act, 1944, and required the payment of duty leviable thereon, but M/s. MUL did not pay the same inspite of having been instructed by the department to do so. M/s. MUL, in this regard, have contended that though the amount of PDI was fixed, or increased/decreased periodically by them, in order to have a uniformity amongst all dealers, and they acted as arbitrator in case of dispute between dealers in this regard, yet the fact is that the amount in question was neither received by M/s. MUL, nor the dealers were ever instructed to transmit that amount to M/s. MUL. I find that it is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale, if that amount has a connection with the sale; and that the definition specifically mentions that the amount charged, inter alia, in connection with 'warranty' has a connection with sale. This, otherwise, needs no proof that warranty promotes and enhances marketability of a product, and in this case, it is a amount of PDI to remain eligible for that warranty. The amount, thus, has a direct nexus with warranty and therefore, would fall within the ambit of definition of transaction value even if realized by the dealer on behalf of M/s. MUL. The facts and evidence further show that the warranty is extended by M/s. MUL and the amount of PDI is also determined and built into the dealer's margin/commission by M/s. MUL; and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43/34/2002-CX., dated 1-7-2002 and later confirmed under Circular No. 684/72/2002-CX., dated 12-12-2002. 4. We have perused the records and have considered the submissions made by both sides. The contention of the appellant is that new Section (w.e.f. 1-7-2002) and the definition of "transaction value" contained in Section 4(3)(d) make no difference to the legal provision. The learned Counsel has submitted that what is required to be included "in addition to the amount charged as price", under the definition of "transaction value", is any amount that the buyer is liable to pay to or on behalf of the assessee by reason of or in connection with the sale of the goods". It is being pointed out that in the present case the ex-factory invoice pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be situations where the amount charged by an assesse does not reflect the true intrinsic value of goods marketed and total value split up into various elements like special packing charges, warranty charges, service charges etc. These cases would require to be scrutinized carefully to ensure that duty is paid on correct value. Such elements have been held to be includible in the assessable value under erstwhile Section 4 by various court pronouncements, notably, the Supreme Court's judgment in MRF case. Now the definition of "transaction value" makes it clear that all the elements of cost which the assessee incurred till the sale/marketing as aforesaid, continue to be included in the assessable value even under new Section 4". Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced w.e.f. 1-7-2002. The reliance placed is on the definition of transaction value contained in Section 4(3)(d). The relevant words of that sub-section are "and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to or on behalf of the assessee, by reasons of or in connection with the sale......... including, any amount charged for or to make provision for............servicing warranty". The reference is to "amount liable to be paid to the assessee or on behalf of the assessee". The words in the definition do not relate to amounts payable to or on behalf of any party other than the manufacturer assessee. In the present case, no amount is payable to or on behalf of MUL towards the two costs, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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