TaxTMI 
TaxTMI 
2011 (7) TMI 983
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.... the country. The goods are to be charged Central Excise duty on the basis of MRP under Section 4A of Central Excise Act, 1944 after allowing the applicable abatement under Notification No. 41/2003 dated 1-4-2003. On the basis of intelligence that the appellants are collecting charges described by them as OSC and RPP separately over and above the MRP of the product and thereby they were altering the MRP thereby under valuation of MRP and short paying duty, the factory was visited and records were scrutinised. After scrutiny of the records, it was alleged that the appellants are charging OSC and RPP over and above the MRP of the product through separate invoice and show-cause notice was issued which was adjudicated and impugned demands were confirmed. Aggrieved by the said orders the appellants are in appeals before the Tribunal. 3. This is a second round of litigation. In the earlier round this Tribunal has remanded the matter vide Order A/433/WZB/06/C-II/EB, dated 27-2-2006 with the following observations :- "3. Inasmuch as the impugned order suffers from violation of principles of natural justice, we set aside the same and remand the matter to Commissioner for fre....
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....itted that the customer had right to opt out of the said contract during any time of the warranty period and on such opting out of the contract the amount of OSC would be refunded. Therefore, it is submitted that the amount of OSC was in no way an additional consideration over and above the MRP as held by the adjudicating authority. (vi) He also submitted that the issue in this case is whether OSC or RPP is an additional consideration recovered separately from the dealers or directly from the customers at the time of sale so as to affect the value under Section 4/4A of the Act. (vii) It was also submitted that the OSC is nothing to do with the sale of the product in fact there is a separate contract for servicing of the product after the expiry of the warranty period. (viii) It was also submitted that as the OSC/RPP are being a service contract attracted service tax and the service tax has been paid on that. (ix) It was also argued that on the same activity levy of both Central Excise duty as well as service tax is not chargeable. (x) He further submitted that it is a well settled law and the Hon'ble Tribunal has ....
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....t cannot be an additional consideration for the purposes of valuation of the product. (xiv) It was also contented that the goods in question were always sold at a price much lower than the MRP declared on the goods. Therefore in any case the OSC was added to the price of the goods sold, the same will add up to a figure much lower than the MRP declared. Hence in any event the said goods are never sold to ultimate buyer at a price exceeding the MRP declared on the goods. (xv) It was also contended that out of total units sold, 1,94,534 customers opted not to enter OSC contract therefore these OSC charges are not includable in the assessable value. (xvi) He further submitted that the order of the Pune Commissionerate has referre to and given immense weightage to the expression "and the like". The expression has to be read noscitur sociis. The only consideration which can form part of the retail sale price as per explanation 1 of Section 4A of the Act, are those charges which have a direct nexus for the completion of sale and not optional charges which by their very nature are not essential for the completion of the sale. To support he relied on the decision in the case ....
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....ifferent and sub silentio therefore can change the decision. To support this contention he relied on the decision in the case of CCE, Calcutta v. Al Noori Tobacco Products - 2004 (170) E.L.T. 135 (S.C.). Therefore, the facts of Electrolux Voltas Ltd. blindly are not applicable to the facts of this case. Hence cannot be taken as precedent. He further submitted that the important aspect that whether dealers can be buyers as admitted by the appellants that the dealers are their buyers as they collect the entire amount on account of sale of goods as well as RPP & OSC charges upfront also gets support from the case of Fiat India Ltd. v. CCE, Mumbai-II, 2006 (193) E.L.T. 126 (Tri.-Mum). He also relied on the decision of MRF Ltd. v. CCE, Madras - 1997 (92) E.L.T. 309 (S.C.) which laid down that after clearances of goods on the classification and the price indicated by the assessee at the time of removal of goods from the factory gate, the assessee becomes liable to payment of duty on that date and time and subsequent reduction in prices for whatever reason cannot be a matter of concern to the Central Excise department in so far as liability to payment of excise duty was concerned. He furt....
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....e & the sale price was the sole consideration for such price. The A.C.C. Ex Chandrapur, observed that the asssessee had recovered Rs. 200/- against each refrigerator towards Optional Service Contract (hereinafter referred as OSC for brevity sake) of 4 years commencing upon the expiry of stipulated one year warranty period from the buyers. This was nothing but an additional consideration flowing directly or indirectly from such sale to the assessee, as such Rs. 200/- recovered by the assessee per refrigerator was includible in the assessable value & appropriate duty was to be leviable on such amount. He therefore issued a show-cause notice dated 6-11-2000 asking the assessee to explain as to why the amount of Rs. 200/- shown in the price declarations filed from time to time w.e.f 1-3-2000 towards OSCs should not be included in the assessable value & why appropriate Central Excise duty should not be recovered under Section 11A of Central Excise Act, 1944 along with interest as per Section 11AA of Central Excise Act, 1944. 7.3 In reply to the show-cause notice M/s. Electrolux Voltas Ltd. submitted that prior to introduction of MRP basis under Section 4A of Central Excise Ac....
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....tomer has to file refund claim. Hence the facts of Electrolux Voltas Ltd. is distinguishable to the facts of this case. 7.5 We have seen that the advertisement sticker showing 5 years warranty of the product sold by the appellants clearly affects the sale price of the product. Moreover, the optional service charges are to be optional to the customer to be paid separately at the time of purchase of the product. In this case, it is clear from the facts that the retail customers are paying OSC/RPP at the time of purchase of refrigerators/washing machines through a composite invoice which includes the sale price + OSC/RPP. Therefore, the customers have no option to choose not to pay optional service charges at the time of purchase of refrigerators/washing machines but in case the customer does not opt for OSC/RPP, the customer has to file a claim of refund of Optional Service Charges/RPP paid by them through composite invoice issued by the dealer. The allegation in the show-cause notice against the appellants are that the appellants are charging OSC/RPP over and above the maximum retail price, therefore, the charges recovered on account of OSC/RPP are to be includable in the as....