TaxTMI 
TaxTMI 
2003 (9) TMI 786
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....m where sales were made eventually to the dealers/buyers. In the middle of September, 1975, the appellants filed price lists in terms of the proposed new Section 4 of the Central Excise Act introduced in October, 1975, indicating that the sales are being made at the factory gate to dealers and also that the vehicles are transferred from the factory to RSOs for sales therefrom, and requested the Asstt. Commissioner to approve payment of duty based on NDP as is applicable to concerned RSO after deducting the cost of transportation. Vide letter dated 30-9-1975, the appellants claimed that duty on clearances to RSOs should also be levied at the prices applicable on wholesale rate, since sales were effected in the course of wholesale trade to dealers at the factory namely, dealers in the State of Bihar. The price lists for clearances to dealers in Bihar were approved by the Asstt. Commissioner's letter dated 1-10-1975. The Asstt. Commissioner also approved separate set of price list filed for clearances to RSOs directing payment of excise duty on NDP charged by RSOs for sales made from RSOs. Thus the price for dealers in Bihar was not made applicable for removals to RSOs for eventual sa....
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....;On the basis of investigations, a show cause notice dated 7-3-2001 was issued proposing recovery of Rs. 1,07,80,57,188/- as basic duty and Rs. 66,99,837/- towards automobile cess on the ground that the price at which the MVCs are sold from RSOs should be based on the value for removals to RSOs (no demand was raised in respect of factory gate sales) and proposing recovery of Rs. 45,66,60,000/- towards excise duty and Rs. 29,51,000/- towards automobile cess by inclusion of charges for pre-delivery inspection and expenses incurred by the dealer and after-sales service charges and warranty carried out by the dealers to the customer in the assessable value of the MVCs. The notice also proposed penal action on the appellants-company under Rule 173Q etc. and on 4 employees of the company under Rule 198 of the Central Excise Rules. The notice was contested. The Commissioner who adjudicated the notice confirmed the demands raised thereunder, imposed penalty equal to duty on the company and confirmed the demand and interest and he also imposed penalties of the following amounts on the following persons :- (1) Shri A.P. Arya, Sr. Vice President (2) Shri S. Muzumdar, former DG....
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....the normal price. The price charged to one class of buyers cannot, therefore, be directed to be adopted as the price in respect of all the classes of buyers. Since the position under the old Section 4 and new Section 4 is held to be the same, this holding holds good for both periods." In the present case, dealers buying goods at the factory gate and those' buying from the depots are buying goods from the appellants on the same terms and conditions and under the identically worded dealership agreement. In such a situation, the MRF decision is not applicable. We note that in the case of Transpek Industry Ltd. [2002 (146) E.L.T. 423], the Tribunal after considering the MRF judgment, rejected the contention of the Department that buyers who bought goods from consignment agents of the assessee are a separate class of buyers from those who bought goods at the factory gate of the assessee. The relevant portion of the above decision reads as under :- "...... We have heard both sides. We find that the Commissioner has discussed 3 fold sale patterns viz. (i) contract sale, (2) ex-factory sale to individual buyers, and (3) clearances to consignment agents and held that sales were ....
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....ols Ltd. were selling their product at the factory gate to independent buyers and they were also clearing goods to their depots and selling there from at different prices. On the basis of evidence placed on record, they claimed that the dealers at different places were different classes of buyers. The Tribunal observed that the question whether a wholesale buyer or dealer is a separate class of buyer or not, is a question of fact which has to be decided on appreciation of the entire evidence. In our view, this decision does not lay down the principle of law that in all cases, dealers' buying from the depots should be treated as class of buyers different from those buying at the factory gate. In the present case, there is no factual basis to treat dealers in different States as separate class of buyers - the terms and conditions of sale are identical for dealers located in various States, there is no uniform maximum retail price inclusive of local tax for the appellants' goods throughout the country; the basic price to the dealers and dealers basic price to customers are always prior to levy of local tax and local sales tax and other local levies are charged extra and are to the buy....
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....ransferred to the regional sales depots of the appellants and reject the finding of the Commissioner that such goods are to be assessed on the basis of the price at which they were eventually sold from the RSO. 9. The finding of the Commissioner is also contrary to the CBEC's circular dated 25-1-1990 which clarifies that dealers situated in different places cannot be treated as different classes of buyers. The circular was relied upon by the Commissioner who did not follow the same, by observing that the situation is changed after the verdict of the Apex Court in the case of MRF. However, the appellants are correct in contending that the above circular is binding upon the Revenue in the light of the Apex Court decision in Dhiren Chemicals [2002 (143) E.L.T. 19] wherein the Court held that although, the expression "on which duty of excise has already been paid" which was the issue in dispute was interpreted by the Court in favour of the Revenue, if there are circulars which have been issued by CBEC placing different interpretation thereupon, that interpretation will be binding upon the Revenue, and in the light of the Tribunal's order in the case of Bharat Aluminium Co. Ltd.....
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.... 11-11-82 AD/V/C 06276 30-9-82 3,00,953 15. Himatsingka Auto Enterprises Banderdewa GG057235 11-11-82 AD/V/C 07042 15-10-82 3,00,952 16. Himatsingka Auto Enterprises Banderdewa GG057237 11-11-82 AD/V/C 07163 19-10-82 1,50,476 17. Himatsingka Auto Enterprises Banderdewa GG057236 11-11-82 AD/V/C 07164 19-10-82 4,50,476 18. Himatsingka Auto Enterprises Banderdewa GG057238 11-11-82 AD/V/C 07264 4,51,428 19. Himatsingka Auto Enterprises Banderdewa GG057278 17-12-82 AD/V/C 08029 11-11-82 3,00,953 20. Himatsingka Auto Enterprises Banderdewa GG057279 17-12-82 AD/V/C 08129 17.11-82 4,51,429 21. Himatsingka Auto Enterprises Banderdewa GG057280 17-12-82 AD/V/C 08221 25-11-82 3,11,554 22. Himatsingka Auto Enterprises Banderdewa GG057281 17-12-82 AD/V/C 08274 30-11-82 3,00,752 23. Himatsingka Auto Enterprises Banderdewa GG061837 19-8-83 AD/V/C 09104 16-12-82 7,00,952 24. Himatsingka Auto Enterprises Banderdewa GG061838 19-8-83 AD/V/C 09105 16-....
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....rises Subansisi GG069288 48. Himatsingka Auto Enterprises Subansisi GG069289 1-8-84 100114 2-5-84 1,84,297 49. Himatsingka Auto Enterprises Subansisi GG069290 1-8-84 100115 2-5-84 1,54,097 50. Himatsingka Auto Enterprises Subansisi GG069291 1-8-84 100116 2-5-84 1,58,097 51. Himatsingka Auto Enterprises Subansisi GG069592 30-9-84 100266 8-6-84 52. Himatsingka Auto Enterprises Subansisi GG073686 19-4-85 100716 25-7-84 1,16,487 53. Himatsingka Auto Enterprises Subansisi GG073687 19-4-85 100684 24-7-84 1,16,487 54. Himatsingka Auto Enterprises Subansisi GG073688 19-4-85 100652 18-7-84 1,16,487 55. Himatsingka Auto Enterprises Subansisi GG073689 19-4-85 100650 17-6-84 1,16,487 56. Himatsingka Auto Enterprises Subansisi GG073690 19-4-85 100620 12-7-84 2,15,634 57. Himatsingka Auto Enterprises Subansisi GG073691 19-4-85 100581 9-7-84 2,16,934 58. Himatsingka Auto Enterprises Subansis....
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.... 8-11-84 2,16,935 81. Himatsingka Auto Enterprises Subansisi GG073578 26-2-85 102046 10-12-84 1,54,872 82. Himatsingka Auto Enterprises Subansisi GG073579 26-2-85 102098 14-12-84 1,54,872 83. Himatsingka Auto Enterprises Subansisi GG073580 26-2-85 102029 6-12-84 1,54,098 84. Himatsingka Auto Enterprises Subansisi GG075332 1-8-85 103601 28-3-85 2,27,230 85. Himatsingka Auto Enterprises Subansisi GG075331 1-8-85 103600 28-3-85 2,27,231 86. Himatsingka Auto Enterprises Subansisi GG075330 1-8-85 103599 28-3-85 2,27,230 87. Himatsingka Auto Enterprises Subansisi GG075329 1-8-85 103598 28-3-85 2,27,230 88. Himatsingka Auto Enterprises Subansisi GG075328 1-8-85 103597 28-3-85 2,27,230 89. Himatsingka Auto Enterprises Subansisi GG075339 1-8-85 103635 29-3-85 1,66,969 90. Himatsingka Auto Enterprises Subansisi GG075349 1-8-85 103798 31-3-85 1,67,548 91. Himatsingka Auto Enterprises Subansisi GG075348 1-8-85 103797 31-3-85 1,6....
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.... Port Blair T174926 8-3-87 115. Himatsingka Auto Enterprises Subansisi GG124703 24-12-92 101601 30-11-85 3,81,221 116. Himatsingka Auto Enterprises Subansisi GG170760 9-11-97 102613 3-8-85 1,32,639 117. Himatsingka Auto Enterprises Subansisi GG124702 24-12-92 100799 29-8-85 1,36,802 118. Himatsingka Auto Enterprises Subansisi GG124701 24-12-92 7,48,860 119. Himatsingka Auto Enterprises Subansisi GG120759 9-11-92 1,48,437 120. Himatsingka Auto Enterprises Banderdewa GG124705 24-12-92 101985 22-12-86 2,85,312 121. Himatsingka Auto Enterprises Banderdewa GG124704 24-12-92 11,01,769 122. Himatsingka Auto Enterprises Banderdewa GG110622 30-8-91 75,94,075 11. In addition, according to the dealership agreement, it is clear that dealers can buy either from the factory or from the depot. The Commissioner does not dispute that sales were made at factory gate even to dealers outside Bi....
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.... into light viz. that sales at the factory gate were made only to dealers in Bihar. However, this is not a new facts as even in the Patna High Court, both sides proceeded on that factual basis. The High Court judgment also noticed that slightly higher price was charged at depot and therefore, it is not open to the Department to contend before us that the slightly higher price charged at depot is a new fact. Therefore, the earlier judgment of the High Court cannot be ignored and the Supreme Court decision dated 10-11-97 reported in 1997 (96) E.L.T. 209 (S.C.) reversing the Patna High Court's subsequent order dated 27-9-88, by which the Court set aside the action of the Department of issuing show cause notice by agitating the ex-RSOs price for goods cleared from the factory of the stock transferred to RSOs, does not affect the position as the Supreme Court reversed the High Court's order essentially on the ground that the High Court could not interfere in a writ petition in the case of provisional assessment, before facts are gathered by the Department. In other words, the reversal of the High Court order dated 27-9-88 was essentially on the ground of alternate remedy available to th....
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....to time, and (ii) in the case of Warranty, prior to 1-10-98, the amount to the extent of 50% of the prevailing "Labour Rates", prescribed by the TELCO themselves from time to time" and the impugned order confirms the demand as above. 15. At the outset, we note that in the appellants' own case relating to their Pune factory in identical circumstances, the Tribunal has held that such charges cannot be included in the assessable value of motor vehicles cleared by the appellants. This decision is reported at 2000 (121) E.L.T. 224 and upheld by the Supreme Court on 13-3-2001 when the appeal filed by the Revenue against the Tribunal's order was dismissed. The issue is also covered by several decisions of the Tribunal such as Philips India Ltd. [1997 (91) E.L.T. 540] and Mahindra & Mahindra [1998 (103) E.L.T. 606 (T) = 1998 (25) RLT 547]. We also note that although the show cause notice alleges that the appellants had collected certain amounts towards PDI charges from their dealers, the statement annexed to the notice itself would show that no amount has been collected by the dealers which is retained by the appellants. The statement of Sh....