2008 (10) TMI 456

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.... inspection and three free after-sale-services in pursuance of warranty arrangement. It is claimed that the said obligations are undertaken by the dealers out of margins provided to them. 3. The Commissioner has included the charges towards pre-delivery inspection and "free services" in the assessable value and demanded duty. The term "transactions value" is defined under Section 4(3)(d) as follows : "4(3)(d)."transaction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, ....

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....aid to the assessee or on behalf of the assessee". The words in the definition do not relate to amounts payable to or on behalf of any party other than the manufacturer assessee. In the present case, no amount is payable to or on behalf of MUL towards the two costs, namely PDI and free after sale service. Therefore, the demand is clearly outside the terms of the Section. The circular dated 1-7-2002 draws upon Rule 6 of the Valuation Rules to support the clarification. We may read that rule to see whether the clarification flows from the words of that Rule either. "Rule 6. Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act except the circumstance where the price is....