TaxTMI 
TaxTMI 
TaxTMI 
1999 (8) TMI 539
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....llants. The transactions with the dealers are on principal to principal basis and the appellants and dealers are not related persons within the meaning of Section 4 (4) (c) of the Central Excise Act. The title on the vehicle passes from the appellants to the dealers on sale thereof at the factory gate and the price is the sole consideration for the sale. The vehicles are sold at ex-factory price to the dealers and the assessable value determined under Section 4 (1) (a) of the Act for the purpose of payment of Excise Duty. The appellants had dealings with number of dealers numbering about 325 located in different parts of India. The dealers maintain their own Show room from where vehicles are sold in retail to the ultimate buyers/customers. These dealers inter alia are also required to maintain the inventory of spare parts and render after sales services and attend to their individual customers' complaints. For this purpose, the dealers employ mechanical and technical persons on their roll. From time to time some dealers request for the service of the engineers of the appellants for supervising their repair jobs undertaken by the dealers and to train mechanical and technical staff s....
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....esent appeal. 5. Shri A. Hidayatulla, Sr. Advocate along with Shri V.S. Nankani and Ms. Shailaja Kher, Advocate appeared for the appellants. Mr. Deepak Kumar SDR appeared for the revenue. 6. Shri Hidayatulla, learned Sr. Counsel argue that the charges for sending service engineers to the dealers is not a compulsory one as disclosed in the agreement between the appellant and the dealer. It is only optional at the discretion of the dealers. The goods are sold on a principal to principal basis. He stated that the decision of the Supreme Court in Civil Appeal No. 480/84 in the case of Vijaya Traders v. Bajaj Auto Ltd. wherein the Hon'ble Supreme Court had held that the dealer was not an agent of the Appellant i.e. not an intermediary of the appellant as was held by the adjudicating authority and that the transaction between appellant and the dealer is on principal to principal basis. The entire operation of the after sales services in this case, it is argued by Shri Hidayatulla, was only for augmenting the sale of the product by the dealer who is the owner of the vehicle. It was emphasised by Mr. Hidayatulla that once the goods have been sold by the assessee to the dealer, ....
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....t even if the appellants' service engineers go to the dealers place and enhances the sale it only augment the resources of the dealer and not of the manufacturer, because goods have been parted with to the dealers by means of sale at the factory gate. He also argued that the Supreme Court in Philips (India) Ltd. v. C.C.E., 1997 (91) E.L.T. 540 is relevant. As far as after sales service is concerned, it was held in paragraphs 6 & 7, that it will benefit both parties and the court wants the excise authorities to keep in mind the legitmate business consideration. There in that case the Supreme Court had dealt with the case where the after sale service was a compulsory one. Even in that respect thereof the court held in favour of the assessee. Shri Hidayatulla states that in view of the fact the same is optional as aforeasiad a fortiarari i.e. for stronger reasons, the assessee is entitled to get the relief here. 7. There is no nexus in this case between the manufacturer and the after sale service. In this connection he also invited our attention to paragraph 49 of the Bombay Tyre International's case to emphasis the fact that in that case the after sale service was given by the ....
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....h 49 of the judgment in the case of Bombay Tyre International case (supra) as extracted below : "49. We shall now examine the claim. It is apparent that for purposes of determining the "value" broadly speaking both the old s. 4(a) and the new s. 4 (1) (a) speak of the price for sale in the course of wholesale trade of an article for delivery at the time and place of removal, namely, the factory gate. Where the price contemplated under the old s.4 (a) or under the new s. 4 (1) (a) is not ascertainable, the price is determined under the old s. 4 (b) or the new s. 4 (1) (b). Now, the price of an article is related to its value (using this term in a general sense), and into that value how poured several component, including those which have enriched its value and given to the article is marketability in the 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 charge....