TaxTMI 
TaxTMI 
1997 (7) TMI 493
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.... had been claimed therein. Show cause notice was issued on 20-5-1982 alleging that appellant had failed to disclose the correct assessable value and had evaded excise duty to the extent referable to such service charges. The show cause notice was resisted by the appellant containing that the said amounts were not recovered from all the customers but only from those who had exercised the option of availing warranty provided for such sets purchased by them. The defence plea was rejected by the Collector to confirm duty demand of Rs. 9,99,823.25 invoking the extended period under proviso to Section 11A(1) of the Central Excise Act. The order has been challenged in the present appeal. 2. Arguing the case of the appellant, Shri K.K. Ananad....
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.... factual position that such sales were made only to Government Department, it is contended, that it was not so and sales were made to other buyers also. It is pleaded that the Tribunal decision in the aforesaid case as also the decision of the Supreme Court in CCE v. Kelvinator of India Limited [1988 (36) E.L.T. 517 (S.C.)] fully support their case as in such cases the manufacturers were recovering compulsory the service charges in the first year where after service facility for subsequent years were optional. In the present case, the contention is that right from the first year the service charges were provided by them on an optional basis and hence the ratio of the aforesaid decisions insofar as the optionality of such charges following t....
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....ass of buyers. The fact that such sales were without collection of service charges would not affect the overall picture of sales made to other buyers where service charges were collected. This would go to show that the defence stand of optionality of the service charges was not a fact and such charges were really obligatory nature. In that view of the matter, the Collector was justified not including the said amount in the assessable value and raising the demands accordingly. In this connection, he cited the Tribunal decision reported in 1986 (26) E.L.T. 317 and further unreported decision in the case of Sonodyne Television Co. Pvt. Limited v. CCE, Calcutta under Final Order No. 2117-18/96-A dated 9-7-1996. He also relied upon the Supreme C....
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....alue. We note that the plea is that, as was held in the Konark Television Limited and Kelvinator cases, the amounts recovered on an optional basis would not form part of the assessable value while, in the impugned order, the Konark decision has been distinguished on the ground that what was held to be excludible in the assessable value was the service charged relating to the subsequent year when they were optional in nature while they were includible in the first year. When they were not optional but realised on a compulsory basis. In the present case, it has been held that the plea taken that they were optional in nature was not factually borne out and instead they were really obligatory in nature. The fact that such collections were not u....