TaxTMI 
TaxTMI 
1987 (2) TMI 312
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....s' and the respondent Collector as 'the department'. 2. The common issue in all these appeals is whether the amount of Rs. 550/- per Television set recovered by the appellants towards annual service charges for the second and the third year (i.e., after expiry of the free warranty period of twelve months) should be included in the assessable value of their Television sets. No other point was pressed before us. 3. The appellants are an undertaking of the State Government of Orissa. They manufactured and sold Television sets. These sets were leviable to Central Excise duty at different slab rates depending upon the value of the set. The lower the value, the lower was the rate of duty. The appellants gave a warranty for twelve months for....
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.... service charge compulsorily recovered from all customers was a part of the sale price of the set and hence includible in the assessable value. 5. The appellants strongly refuted the finding of the lower authorities and contended that the service charge was neither compulsory nor recovered from all the purchasers. Since there was a dispute on the basic facts themselves, the Bench asked the Collector to record the evidence on the point of fact and to send it to the Tribunal. The Collector has since done so. The Collector himself examined the Managing Directors of the appellants' Company and elicited replies on pertinent points. It was, indeed, quite and in-depth examination. The Managing Director has, in addition, submitted a detailed Aff....
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....of the department, however, contested the appellants' case saying that the appellants had not rebutted the allegation of compulsory recovery of service charge made in the show cause notice before the Assistant Collector at the time of adjudication. The appellants explained that at that time the judgment of the Supreme Court in the case of Bombay Tyre International [1983 (14) E.L.T. 1896 (S.C.)] had not yet come. At that time, a large number of High Courts all over the country had taken the view that post-manufacturing expenses were not to be included in the assessable value. Their pleading, at that time, was conditioned by the view taken by these High Courts. Accordingly, in their defense reply they had laid stress on the point that mainten....
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....e appellants could not be expected to undertake maintenance contracts for the second and the third year on no profit no loss basis. The optional maintenance activity for these subsequent years was quite separate from the manufacture and initial marketing of the Television sets and hence we find no basis to include the unknown profit element from this maintenance activity in the assessable value of the Television sets. 9. The learned representative of the department relied on paragraphs 47 and 49 in the aforesaid Supreme Court judgment in Bombay Tyre International case. The scope in these paragraphs has been further clarified by the Supreme Court in their recent judgment dated 20-12-1986 in the case of Madras Rubber Factory (Civil Appeal ....