TaxTMI 
TaxTMI 
2011 (3) TMI 1548
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....hat "optional service charges" at the rate of Rs. 175 per refrigerator under a separate contract of warranty for providing after sale services in respect of unit of refrigerators sold by the assessee for a period of four years, would not form part of taxable sale price in the hands of the respondent-assessee and, therefore, the imposition of the difference tax, interest and penalty was not justified. The said impugned order of the Tax Board dated August 26, 2004 was passed following earlier detailed order of the Tax Board in the case of the same assessee while deciding Appeal No. 1185/1998/Jaipur Godrej GE Appliance Ltd. v. Commercial Taxes Officer on October 28, 2002 wherein the Division Bench of the Tax Board referring to the decisions....
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....he judgment of the honourable Supreme Court in Collector of Central Excise, Delhi v. Kelvinator of India Ltd. [1988] 69 STC 427 (SC) arose under the Central excise law and is, therefore, not applicable to the facts of the present case. On the other hand Mr. T. C. Jain, learned counsel appearing for the respondent-assessee, submitted that the controversy in hand stands concluded by the aforesaid decision of the honourable Supreme Court as well as the decisions of this court and, therefore, it is no longer res integra and the controversy in hand deserves to be decided in favour of the respondent-assessee. He also submitted that the detailed order of the Tax Board dated October 28, 2002 for the preceding year has become final and the assess....
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....refrigerators for the purpose of assessment of Central excise duty under section 4 of the Act. It was found as a fact by the Tribunal that after the free warranty period of one year is over, the respondents herein offer a four-year service contract only for the sealed system or parts thereof. This contract is not free. It is on payment basis. The contract is not compulsory and the four dealers entered into service contract in respect of 91 per cent of their purchase. They did not make the contract for the remaining nine per cent. It is also not necessary that the contract should be made right at the time of purchase of the refrigerator from the respondents. In fact, it was found as a fact that some time contract was made only in less than 1....
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.... and enter into its value in the trade. Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee up to the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted. But the assessee will be entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery.' ...... The Tribunal also observed that the respondents herein offer....
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....ds will be included in the sale price. This definition has further been extended to include such further sums which might be charged for anything done by the dealer in respect of the goods at the time of or before the delivery. If the dealer is charging one sale price irrespective of the warranty for the second and subsequent years then the position may be different, but if it is optional to the purchaser to avail of the benefit of the warranty or not to avail of in respect of the second and the subsequent years for which a separate payment is made in addition to the sale price, then such separate payment cannot be included in the sale price. The payment by way of warranty is like an insurance charge and when the said amount is collected th....
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....unts charged are separate for the value of the commodity and the warranty charges and the said payment have not been collected from all the dealers, then the same will not form part of the sale price.' In view of the decision given by this court I am of the view that the matter should go back to the assessing authority for recording finding as to whether the warranty charges were optional and whether they were separately charged. The assessee shall produce the books of accounts, documents and the agreement in proof of the contentions raised by him that the said charges do not form part of the sale price." In view of the aforesaid binding precedents and moreover in view of the fact that order of the Tax Board in the case of the sam....