2013 (12) TMI 114

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n setting aside the order passed by the lower authority by allowing the appeal of the assessee in respect of Predelivery Inspection (PDI) and Free Service Coupon (FSC) charges for the period from 1.7.2000 to 31.3.2001. Consequent to the introduction of new Section 4 with effect from 1.7.2000 in the Central Excise Act, 1944 wherein the concept of valuation of excisable goods for the purpose of charging the duty of excise has been changed from the concept of normal price in the course of wholesale trade to the concept of individual transaction value. The transaction value as explained by Section 4(3)(d) reads:- 'transaction value' means the price actually paid or payable for the goods, when sold, and includes in addition to the amount char....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the sale of the goods to the dealer and will therefore be governed by Rule 6 of the Valuation Rules and such PDI and FSC charges will have to be included in the assessable value for the purpose of payment of duty. This view has been confirmed by the Board vide Circular No. 643/34/2002 dated 1.7.2002 and Circular No. 681/72/2002 dated 12.12.2002. 3. Heard both sides. The learned advocate for the respondent submits that the issue is no longer res integra and is covered by a decision of the Hon'ble High Court of Bombay in the case of Tata Motors Ltd. [2012 (286) ELT 161 (Bom)]. He further submits that there was a Larger Bench decision in the case of Maruthi Suzuki India Ltd. Vs Commissioner [2010(257)E.L.T. 226(Tri-LB)] having a contrary v....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of Tata Motors Ltd. and their observations in paras 46 to 48 are relevant and are reproduced below for better appreciation. 46. We have noted that after the amendment to Section 4 of the said Act in the year 2000, pursuant to Section 94 of the Finance Act, 2000, the respondents issued Circular No. F.B-10/1/2000-TRU, dated 12th May, 2000 as also Circular letter F. No. 354/81/2000/TRU dated 30th June, 2000. A reading of these two Circulars would clearly go to show that the respondents wanted to clarify the term transaction value and these two Circulars were to be used as guidelines while arriving at the assessable value. Considering these Circulars, we are inclined to accept the submission advanced by learned Senior Counsel Mr. Sridharan t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....arges is incorrect. In our view. Clause No. 7 of Circular dated 1st July, 2002 is not in conformity with the provisions of Section 4(1)(a) r/w Section 4(3)(d) of the said Act. 48. The matter can be looked from yet another angle namely; a perusal of the term 'transaction value' would show that servicing is one item, which is included in the definition of the term 'transaction value'. In our view, on the basis of record it is clear that the petitioners do not render any services to the dealer and no cost is incurred by the petitioners qua the dealer towards the term 'servicing'. As such, the petitioners have not included any amount in the assessable value with reference to term 'servicing' and as such the expenses incurred towards PDI and ....