Customs, Excise and Gold Tribunal - Delhi
Standard Motor Products India Ltd. vs Collector Of C. Ex. on 15 April, 1987
Equivalent citations: 1989(41)ELT646(TRI-DEL)
ORDER I.J. Rao, Member (T)
1. The question that arises in this appeal, originally filed as a Revision Application before the Government of India and transferred to this Tribunal for disposal as an appeal, is whether the amount of Rs. 1,000/- realised by the appellants at the time of clearance of motor vehicles should be treated as part of the assessable value or not. The appellants, well known manufacturers of motor vehicles, entered into an agreement with D.G.S. & D. for sale of their vehicles. The agreement stipulated two kinds of buyers, namely, Defence Indentors and non-defence civilian in-dentors. Due to commercial reasons the appellants used to raise the price by Rs. 1,000/-when the vehicles were supplied to the Civilian Indentors. This amount was intended to cover the subsequent after sale service of the vehicles. The appellants used to transfer the same amount, namely Rs. 1,000/-, to the dealers. The Central Excise Department ap-proved the price lists filed by the appellants. The value of the vehicle in respect of the Civilian Indentors was however declared without, including the amount of Rs. 1,000/-. The consequent proceedings by the Central Excise Department culminated in the revision of the assessable value of the vehicles supplied to the Civilian department by adding Rs. 1,000/-. The Assistant Collector's orders to put effect were upheld by the Appellate Collector. Hence the present appeal before us.
2. Shri Krishna Srinivasan the learned Counsel for the appellants recalled the facts of the matter and submitted that the collection of Rs. 1,000/- extra in respect of Civilian Indentors was a part of the contract with D.G.S. & D. He explained that the collection of-Rs. 1,000/- was not included in the price list as the appellants considered that this amount invariably did not accrue to them but to the dealer and therefore, it was not a part of the price. He emphasized that the appellants were merely collecting the amounts only to hand over the same to the dealers. Hence, Shri Krishna Srinivasan submitted, the amount of Rs. 1,000/- was not a part of the price and could not be taken as part of the value. Therefore, according to him, neither under Section 4 nor in equity can this amount be added to the price of the vehicle.
Shri P.K. Ajwani, the learned SDR opposing the arguments referred to Section 4(1)(a) of the Central Excises and Salt Act and submitted that according to this Section the normal price i.e. to say the price at which goods are ordinarilv sold by the assessee to the buyer in the course of wholesale trade for delivery at the time and place of removal is the sole consideration of the price. Shri Ajwani also referred Section 2(h) of the Act and submitted that at the time and place of removal of the goods the amount which was collected by the appellants includes the amount of Rs. 1,000/- and therefore, it constituted a part of the price. The learlied SDR particularly pointed out that the extra collection of Rs. 1,000/- was not inducted in the price list.
Shri Krishna Srinivasan in his rejoinder pleaded that the amount which the appellants received was only the price of the vehicle which did not include the amount of Rs. 1,000/- which was collected only to be handed over to the dealer.
We have carefully considered the arguments of both sides. The facts are not dis-puted. We have perused the contract between the appellant and the D.G.S. & D. We perused the invoices and credit notes. In respect of vehicles supplied to Civilian Inden-tors, the invoices included an amount of Rs. 1,000/- over and above the price declared in the price lists. This amount appears as an item in the invoices. We also note that the appellants issued credit notes to the dealer for Rs. 1,000/- with reference to the invoice under which the vehicles sold to the Civilian Indentors.
On these clear facts it has to be held that at the time and place of sale, the amount received by the appellants as consideration for the sale included the amount of Rs. 1,000. The fact that at a subsequent point the same amount was given to the dealer does not alter this fact. The provisions of Section 4 are quite clear in this regard. The item deduc-table from the price are defined therein. Therefore there is no question of exclusion of this amount from the sale price. In the circumstances we hold that the order passed by authorities below are correct, in law.
We therefore reject the appeal.