TaxTMI 
TaxTMI 
1998 (3) TMI 212
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....count. The price lists were approved and appellant had been clearing the motor vehicles on payment of duty on the approved prices. On a visit by the Central Excise officers to the appellant's factory, they checked the appellant's records and found that in the invoices issued by the appellant to the customers, dealer's mark up was shown and included in the sale price which was passed on by the appellant to the dealers as payment for their providing pre-delivery inspection (P.D.I.), after sales service and warranty obligations. Such dealer's mark up amount was not included by the appellant in the assessable value for purposes of payment of excise duty. Show cause notice dated 15-2-1989 was issued to the appellant alleging short payment of exc....
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....lful misstatement and no intent to evade duty. The dealer's mark up amount per vehicle varied from Rs. 7,000/- to Rs. 6,500/- which was later raised to Rs. 7,250/-. The dealer provides three free services to the customers after the vehicles have run specified distances. The amount received by the dealer for performing this activity for the benefit of the customer cannot be added to the assessable value of the vehicles. It was then submitted by Shri Ramasubramanian that the price being the retail one, suitable deduction has to be allowed to arrive at the assessable value. He cited Tribunal decision in Modi Zerox Ltd. v. Collector of Central Excise - 1989 (40) E.L.T. 481 wherein sales of photocopying machines to customers were held to be reta....
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.... upon the purchaser who has to get the servicing done only if required within the guarantee period. 4. We have considered the submissions and perused the record. The plea was taken before us that their entire sales were made to their customers directly and hence such sales have to be taken as retail sales. We, however, find that the plea taken in the reply to the show cause notice was that the prices charged for the vehicles whether they are sold to the dealer or to any other buyer included the warranty claim value in every case without exception. The warranty claims were being settled by the appellant directly or through the dealer and irrespective of whether the vehicle is sold directly by appellant to the user or it is sold by th....
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....038/97-A, dated 28-11-1997 in Appeal No. E/1236/89-A [1998 (98) E.L.T. 206 (Tribunal)]. It was observed therein that the customers must be assured about the quality and condition of the product. Pre-delivery inspection is conducted by dealers though at the instance of the manufacturer to satisfy the customers about the quality and condition and for this purpose a small charge is collected from the customers. (In the present appeal no amount is separately charged from the customers but the price includes such an amount). The price to be charged from the customer is fixed by the manufacturer. The pre-delivery inspection charge is included in the dealer's margin. The inspection is an activity subsequent to the clearance at the factory gate and....