AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1462
X X X X Extracts X X X X
X X X X Extracts X X X X
....he dealers purchased the vehicles from the appellant at an ex-factory price and sell them to the ultimate customer after including dealer's margin at price not exceeding maximum price. All the final products sold by the appellant are subject to manufacturers' warranty for any manufacturing defects. Further, in order to avail the warranty claim, the customers are required to fulfill certain pre-conditions as mentioned in the customer/owner's manual. Further, as per the dealership agreement the dealers are responsible for providing free service to the customers from time to time and the expenses incurred in respect of such free services are reimbursed by the appellant on the basis of claims made by the dealers. 2.2 During the course of audit of the appellant's records, it was noticed that the appellant is not including the after sale expenses reversed to the dealers in the assessable value. Further, it was found that after sale service and pre-delivery are services provided by the dealers on behalf of the manufacturer and the cost towards this is to be included in the dealers margin or is reimbursed to the dealers. It is further alleged that this being one of the consi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ler to the appellant is the sole consideration for computation of assessable value in terms of Section 4(3) of the Excise Act and no additional consideration is provided to the appellant. 4.3 He also submits that the appellant reimbursed the amount of expenses incurred by the dealers for ASS as per the agreement between them and therefore, the cost of such free service which is reimbursed is in fact borne by the appellant and is already included in the assessable value of the goods and cannot be further included in the assessable value again. In support of this submissions, he has relied upon the following decisions: • General Motors India Private Limited vs. Commissioner of Central Excise, Pune-12022 (4) TMI 1539-CESTAT MUMBAI. • Skoda Auto Volkswagen India Private Limited vs Commissioner of Central Excise, Aurangabad 2021 (12) TMI 239-CESTAT MUMBAI. • Tata Motors Ltd. vs. Commissioner of Central Excise, Pune-1, Commissioner of CCE & ST, LTU 2019 (12) TMI 1647-CESTAT MUMBAI. • Commissioner Of Central Excise, Mysore vs. TVS Motors Company Ltd. 2015 (12) TMI 874-SUPREME COURT. • Escorts Limited vs. CST, Delhi - IV, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the cost of ASS shall not be includible in the assessable value of the goods. Here, it is relevant to reproduce the relevant findings in the appellant's own case for the previous period decided by this Tribunal as cited supra, which are reproduced herein below: "8. Heard both sides and perused the records of the case. We find that the show-cause notice mentions at Para 2 that: "During the course of audit of the Noticee's records by the Internal Audit Team of the Commissionerate from 19th to 22nd January 2011, it was noticed that the Noticee was not including the "After Sales expenses reimbursed to the dealers" in the assessable value. It is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer's margin (or reimbursed to him). This is one of the considerations for sale of the goods (motor vehicles, consumer items etc.) to the dealer and will therefore be governed by Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (hereinafter referred to a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dealer's margin is paid by the appellants to their customers. The Show Cause Notice seeks to demand duty on expenses reimbursed by the appellants to their dealers. It is beyond our imagination as to how these amounts constitute flow of additional consideration unless it is evidenced either that the appellants are allowing the dealers to collect the margin payable, by the appellant to the dealers, from ultimate customers or that the additional amounts charged by the dealers from ultimate customers is actually flowing back to the appellants. Only under these two conditions the said expenses can be held includable in the assessable value even under the old or amended definition of Section 4 of CEA, 1944. We find that Adjudicating Authority also finds at Para 17.3 of the impugned order as follows: "I find that from the perusal of Rule 6 ibid and Clause (a) of sub section (1) of section 4 of the CEA 1944 it becomes clear that the After Sales expenses reimbursed to the dealers by the Noticee were includible in the assessable value and by not doing so the Noticee had short paid excise duty on under-valued finished goods which were manufactured and cleared by them. In their reply ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of different dates. Hence, we are of the opinion that the same cannot be compared. In case the dealer has defaulted on the Dealership Agreement, the same in itself cannot be a reason to include such amounts, collected by the dealer from the customers, in the assessable value. 13. It is not forthcoming from the show-cause notice or from the records of the case that the amount recovered by the dealers over and above the listed price sanctioned by the appellants is towards the amount reimbursable by the appellants to the dealers. It is also not established that the amount extra collected is towards the PDI and ASS. There is no evidence to prove that the amount charged extra by the dealers is flowing back towards the appellant. In view of this, we find that the impugned order as well as the arguments of the learned Authorized Representative and to some extent, argument of the Counsel also is beyond the scope of the show-cause notice. No case is made for the inclusion of "after sale expenses reimbursed to the dealers by the Noticee" except for a bland averment in Para 2 of the show-cause notice that it is a well-known fact in case of motor vehicles manufacturers that After Sale....