Custom, Excise & Service Tax Tribunal
Cnh Industrial (India) Pvt Ltd (Earlier ... vs Cce Mumbai - Ii on 29 June, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.
Appeal No. E/580/09
(Arising out of Order-in-Original No. 38/Commr.M-II
dtd.20.02.2009 passed by the Commissioner of Central Excise,
Mumbai-II )
CNH Industrial (India) Pvt. Ltd. : Appellant
VS
Commissioner of Central Excise, Mumbai-II : Respondent
Appearance Shri Rajesh Ostwal, Advocate for Appellant Shri A.B. Kulgod, Asstt.Commr. (A.R) for respondent CORAM:
Hon'ble Dr. D.M. Misra, Member (Judicial) Hon'ble Mr. Sanjiv Srivastava, Member (Technical) Date of hearing : 29/06/2018 Date of decision : 29/06/2018 ORDER NO. A/86865/2018 Per : Dr. D.M. Misra This is an appeal filed against order-in-original No.38/Commr. M-II dtd. 20.02.2009 passed by the Commissioner of Central Excise, Mumbai-II.
2. Briefly stated the facts of the case are that the appellant are engaged in the manufacturer of Motor Vehicles classifiable under 2 E/580/09 Chapter Sub-heading No. 87039090 of Central Excise Tariff Act, 1985. Alleging that the appellant during the period 1.9.2003 to 30.4.2007 had short paid duty, inasmuch as they had failed to include the Pre Delivery Inspection charges and Cost of free services incurred by the dealers in their assessable value, demand notice was issued to them on 22.9.2008 for recovery of the duty amounting to Rs.58,01,062/- with interest and proposal for penalty. On adjudication, the demand was confirmed with interest and penalty. Hence, the present appeal.
3. Ld. Advocate for the appellant submits that prior to 1.9.2003 the Pre Delivery Inspection charges and free after sale services expenses incurred by the dealers in respect of vehicles purchased from the appellant, were reimbursed by them to dealers and the said cost was not included in the assessable value of the vehicles sold by them being claimed as deduction. It is his contention that after 1.9.2003 the said Pre Delivery Inspection and after sales service expenses incurred by the dealers, were not claimed as deduction by the appellant and appropriate duty has been discharged on the same by including the said cost in the transaction value. Therefore, the value of Pre Delivery Inspection and after sales service expenses since borne by them and not claimed as deduction cannot be charged to excise duty again even if, the same has been reimbursed by them to the dealers. Further, he has submitted that the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Mysore Vs. TVS Motors Co. Ltd.
3 E/580/09 2016 (331) ELT 3 (S.C.) observed that the Pre Delivery Inspection charges and free after sales service charges cannot be included in the assessable value under Section 4 of the CEA 1944 for the purpose of determination of duty.
4. Ld. AR for the Revenue reiterates the findings of the Ld. Commissioner.
5. Heard both sides and perused the records.
6. We find that the short issue involved in the present appeal is:
whether the value of Pre Delivery Inspection charges and After Sales Service charges incurred by the dealers on the motor vehicles purchased from the appellant be included in the value of the motor vehicles while determining the excise duty on the same. It is the contention of the appellant that after 1.3.2003, they have not claimed deduction on account of Pre Delivery Inspection charges and After Sales Service charges incurred by their dealers in providing such services from the assessable value of vehicles sold, even though the said amount was reimbursed to them. To this claim of the appellant, the Revenue has not placed any contrary evidence. We also find that even otherwise also the Hon'ble Supreme Court in TVS Motors Co. Ltd. case (supra) observed that Pre Delivery Inspection charges and after Sales Service charges cannot form part of assessable value of motor vehicles. Their Lordships observed as follows:
4 E/580/09 "19. The sequitur of the aforesaid discussion would be to hold that PDI charges and free ASS charges would not be included in the assessable value under Section 4 of the Act for the purposes of paying excise duty. The view taken by the Tribunal in favour of assessees in this behalf is correct in law and all the appeals of the Department, i.e. C.A. Nos.
5155-5156/2007, 1763-1764/2009, 2204/2013, 2205/2013, 957-959/2014, 7854-7865/2014 and 7444/2008 are dismissed. On the other hand, Larger Bench view in Maruti Suzuki does not lay down the law correctly and is, therefore, overruled and the appeals filed by the assessees, i.e. C.A. Nos. 7007/2011, 7550/2011 and 3768-3769/2011 are allowed."
7. In view of the aforesaid circumstances, the impugned order is devoid of merit. Accordingly, the same is set aside and the appeal is allowed.
(Pronounced in court )
(Sanjiv Srivastava) (Dr. D.M. Misra)
Member (Technical) Member (Judicial)
SM.