Dealer-incurred service costs excluded from transaction value for pre-deposit relief in car valuation dispute.

Dealer-incurred expenses for pre-delivery inspection and free after-sale services were treated as not prima facie includible in the cars' transaction value for waiver of pre-deposit. The dealership arrangement required the dealer to provide those services, and the vehicles were cleared on a principal-to-principal basis at a price already reflecting the dealer's obligations. Relying on the earlier Supreme Court view that such service costs are not includible absent reimbursement or flow-back to the assessee, the interim contrary Larger Bench view was not applied to deny relief. Pre-deposit of duty, interest and penalty was therefore waived and recovery stayed.

---

---

Issues: Whether, for purposes of waiver of pre-deposit, the dealer-incurred expenses towards pre-delivery inspection and free after-sale services were prima facie includible in the transaction value of the cars cleared to dealers.

Analysis: The appeal arose from a demand based on inclusion of the cost of free pre-delivery inspection and three free services in the assessable value. The dealership arrangement required the dealer to provide those services, and the cars were cleared to dealers on a principal-to-principal basis at a price already taking the dealer's obligations into account. On a prima facie view, the expenses incurred by the dealer for those services were not part of the transaction value. Support was drawn from the earlier Supreme Court view that such dealer-incurred service expenses were not includible where there was no reimbursement or flow back to the assessee, and the contrary Larger Bench view was treated as not displacing that prima facie position for the purpose of interim relief.

Conclusion: The condition of pre-deposit of duty, interest and penalty was waived and recovery was stayed.

---