Custom, Excise & Service Tax Tribunal
M/S. Maruti Suzuki India Ltd vs Cce, Delhi-Iii on 20 April, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No. 2, R.K. Puram, NEW DELHI COURT No. I CENTRAL EXCISE APPEAL NO. 1958 OF 2005 [Arising out of Order-in-Original No. 7,8,9/CE/JM/08 dated 30.4.2008 passed by the Commissioner, Central Excise, Delhi-III, Gurgaon] Dated of hearing: 20th April, 2010 For approval and signature: Honble Shri Justice R.M.S. Khandeparkar, President; Honble Dr. Chittaranjan Satapathy, Member (Technical); Honble Shri D.N. Panda, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Departmental authorities? M/s. Maruti Suzuki India Ltd., Appellants Vs. CCE, Delhi-III Respondent
Appearance:
Shri V. Lakshmikumaran, Advocate for the appellant;
Shri Sunil Kumar, Authorised Representative (SDR) for the Revenue Coram:
Honble Shri Justice R.M.S. Khandeparkar, President;
Honble Dr. Chittaranjan Satapathy, Member (Technical);
Honble Shri D.N. Panda, Member (Judicial) ORDER NO._________________ dated __________ Per JUSTICE R.M.S. KHANDEPARKAR:
The point for consideration which has been referred in this matter is:-
Whether the charges towards pre-delivery inspection and after-sale-service by dealers from buyers of the cars are to be included in the assessable value of cars in the light of the definition of transaction value given in Section 4(3) (d) of the Central Excise Act, 1944?
2. The above issue has arisen for consideration on account of the order passed by the Commissioner, Delhi on 30th April, 2008, whereby the charges towards pre-delivery inspection and free services for the period May 2005 to August 2007 are ordered to be included in the assessable value and the excise duty has been demanded on such assessable value from the appellants, while it was the claim of the appellant to the contrary contending that the issue had been settled by the Tribunals order in appellants own case decided on 16th April, 2004, and reported in 2004 (170) ELT 245.
3. It is the case of the appellants that the definition of the expression transaction value contained in the statutory provision existing prior to amendment makes no difference to the legal provision subsequent to 1st July, 2002 and considering the decision in appellants own case reported in 2004 (170) ELT 245, that in Bombay Tyre International case reported in 1983 (14) ELT 1896 and the Supreme Court order in the appellants own case dismissing the appeal filed by the department reported in 2006 (201) ELT 28, the issue stands concluded. Therefore, it is not open for the department to re-agitate the same and that too contrary to what has been decided earlier. On the other hand, it is the case of the department that Section 4 of the Central Excise Act, 1944, (hereinafter referred to as the said Act) as amended w.e.f. 1st July, 2000, has incorporated the concept of transaction value for the purpose of assessment in place of earlier concept of normal wholesale price and accordingly whatever is recovered from the buyer by reason of or in connection with the sale, whether payable at time of sale or at any other time, directly or indirectly, to the manufacturer or payable on behalf of the manufacturer to a dealer including the charges for servicing and warranty, will have to be included in the assessable value. According to the respondent, the decisions sought to be relied upon on behalf of the appellants, the same either relate to the period prior to the amendment of Section 4 or pertain to the issues not relating to the matters to which the amended provisions apply and hence are of help in the case in hand.
4. We have heard, at length, the learned counsel for the appellants and learned D.R. for the respondent.
5. Before we proceed to analyse their contention in relation to the issue referred for consideration, it would be appropriate to record the undisputed facts of the case wherein the issue has arisen for the consideration.
6. The appellants are manufacturers of various types of motor vehicles classifiable under Chapter 87 of the Central Excise Act, 1985. The vehicles are chargeable to duty on ad valorem basis. Three show cause notices came to be issued to the appellants, namely show cause notice dated 22nd May, 2006 in relation to the period from May, 2005 to March, 2006, another dated 7th May, 2007 in relation to April, 2007 to February, 2008 and third one dated 19th November, 2007 in relation to the period of November, 2006 to August, 2007. The said show cause notices were issued on the ground that dealership agreement entered into between the appellants and their dealers provided for various terms and conditions which included provision for servicing and warranty including free service and the same disclosed the services to be rendered by the dealers which revealed provision for after sale service, the consideration for which was sought to be absorbed in the dealers margin but was decided and revised by the appellants, apart from their overall supervision over the sale activity of their cars made available to the dealers for the said purpose. It was the case of the department that while selling the vehicles to the customers after they are made available to the dealers, the dealers add their own margin known as the dealers margin to the price at which the vehicles were made available to them by the appellants and the difference between sale price at which the vehicles are sold to the customers and the original amount paid by the dealers to the appellants, i.e. dealers margin contained provision for rendering pre-delivery inspection and three after sale services. Taking into consideration the concept of transaction value under new Section 4 of the said Act, w.e.f. 1st July, 2000, which provided that whatever is recovered from the buyer by reason of or in connection with sale, whether payable at time of sale or any other time, directly or indirectly, to the manufacturer or paid on behalf of the manufacturer to the dealer including the charges for servicing and warranty, was to be included in the transaction value and considering the same for the relevant period, three show cause notices came to be issued, requiring the appellants to show cause against their liability to pay the duty along with interest and penalty. The relevant period is from May, 2005 to August, 2007.
7. The appellants contested the proceedings by filing their replies to the show cause notices. The replies to all the show cause notices were to the effect that the matter stood concluded by the order in the appellants own case reported in 2004 (170) ELT 245, read with the order of the Supreme Court in dismissing the appeal filed against the said order and reported in 2006 (201) ELT 28, and hence the proceedings needed to be closed.
8. In view of the said specific defence raised, it would be appropriate to ascertain whether the said issue stands answered and concluded by the decision of the Tribunal in the appellants own case.
9. Undoubtedly, the facts of the appellants own case decided on 16th April, 2004 by the Tribunal and reported in 2004 (170) ELT 245 disclose that the dispute which arose for consideration in the said case was whether the cost of post delivery inspection and sale services were to form part of the assessable value of the automobile while discharging the duty liability. The Tribunal, in its order, after reproducing the findings arrived at by the adjudicating authority observed thus:-
3.?It is clear from the last two paras reproduced above that the issue remains concluded in favour of the assessee by the judgment of the Apex Court but the same is being reopened because of the substitution of the valuation provision (Section 4 of Central Excise Act, 1944) w.e.f. 1-7-2002 and the clarification issued by the Central Board under its Circular No. 643/34/2002-CX., dated 1-7-2002 and later confirmed under Circular No. 684/72/2002-CX., dated 12-12-2002.
10. Having recorded as above, the Division Bench then noted in brief the contentions raised on behalf of both the parties. The sum and substance of the arguments canvassed on behalf of the assessee was that new Section (w.e.f. 1-7-2002) and the definition of transaction value contained in Section 4(3)(d) makes no difference to the legal provision. What is required to be included in addition to the amount charged as price, under the definition of transaction value is any amount that the buyer is liable to pay to or on behalf of the assessee by reason of or in connection with the sale of the goods. In appellants case the ex-factory invoice price was the only amount which the buyer was liable to pay either to the manufacturer or on his behalf in connection with the sale of the goods. It was, therefore, contended that the distinction made in the impugned order between the replaced Section 4 and new Section 4 was contrary to the words of the new section themselves. The PDI and service charges remained included in the commission of the dealer and commission payable to him by the buyer were not payable to the manufacturer, and therefore, the collection of commission and rendering of services were entirely outside the scope of the sale of the automobiles by the manufacturer to the dealers. What is required to be included in the assessable value under the new Section is the value, including the cost incurred in relation to the manufacture and not the cost incurred on remuneration received by the dealer. The circular dated 1.7.2002 issued by the Board was not in conformity with the Section 4 of the said Act. On the other hand, it was the contention of the department that the circular was in conformity of the definition of the transaction value under new Section 4 and PDI and the services were provided by the dealer on behalf of the assessee, and therefore, the cost towards the same formed part of the assessable value.
11. Having recorded the contentions of the paraties in the matter, the Tribunal proceeded to hold as under :-
The dispute has been reopened by the Revenue in view of the purported enhanced scope of Section 4 and Valuation Rules (Rule 6 as referred to in the clarification dated 1-7-2002) introduced w.e.f. 1-7-2002. The reliance placed is on the definition of transaction value contained in Section 4(3) (d). The relevant words of that sub-section are and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to or on behalf of the assessee, by reasons of or in connection with the sale......... including, any amount charged for or to make provision for............servicing warranty. The reference is to amount liable to be paid to the assessee or on behalf of the assessee. The words in the definition do not relate to amounts payable to or on behalf of any party other than the manufacturer assessee. In the present case, no amount is payable to or on behalf of MUL towards the two costs, namely PDI and free after sale service. Therefore, the demand is clearly outside the terms of the Section. The circular dated 1-7-2002 draws upon Rule 6 of the Valuation Rules to support the clarification. We may read that rule to see whether the clarification flows from the words of that Rule either.
Rule 6.?Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. (emphasis supplied).
The reading of the above rule makes it clear that money value of any additional consideration flowing directly or indirectly from the buyer to the assessee is required to be added. In other words, the criterion is the same under Rule 6 also i.e. amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee should be added to the transaction value to find out the aggregate value of the goods. Again, additional consideration should be flowing directly or indirectly from the buyer to the assessee. Thus, the definition and Rule 6 will have no application to considerations not flowing to the assessee. In the present case, admittedly, nothing flows to the assessee, MUL from the consideration towards PDI and after sale service. For that reason, cost of these charges cannot form part of the assessable value of the automobiles in question. While on this issue, it would be appropriate to recall that valuation provisions under Section 4 constitute the machinery provision for levy and collection of duty and a machinery provision cannot be interpreted to grossly exceed the scope of the levy. (Emphasis supplied)
12. Bare perusal of the said order dated 6th April, 2004 would disclose that the Tribunal decided the matter on admitted facts of the case and did not decide the issue which arise for consideration in the matter in hand. The findings that In the present case, admittedly nothing flows to assessee MUL from the consideration towards PDI as after sale services and further that For that reason, both of these charges cannot form part of assessable value of the automobiles in question clearly disclose that the case was decided not on the point of law but on facts of the case and that too, on admitted facts. Being so, it cannot be said that the issue stands concluded by the said order.
13. It is true that by order dated 3rd of April, 2006 the appeal which was sought to be filed against the said order of the Tribunal dated 16th April, 2004 was dismissed by the Apex Court. The order of the dismissal passed by the Apex Court reads thus:-
Heard.
There is an inordinate delay of 645 days in filing the present appeal. Sufficient cause has not been shown to condone the delay. Consequently, civil appeal also dismissed on the ground of delay. Undisputedly, the appeal was not dismissed on merits but it was dismissed merely on the ground of inordinate delay in filing the appeal. Such an order cannot be construed as confirming order passed by the Tribunal. The law in that regard is well settled by the decision of the Apex Court in Kunhayammed vs. State of Kerala reported in 2001 (129) ELT 11 (S.C.). Obviously, therefore, the decision dated 16.4.2004 by the Tribunal in the appellants own case is no answer to the issue referred to this Bench, apart from the fact that the said decision was not on the point for consideration in this matter.
14. The definition of the term transaction value as is found in Section 4(3) (d) of the said Act reads thus:-
(d) transaction value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.
15. The definition of the expression transaction value undoubtedly uses the expression any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including . servicing, warranty, commission or any other matter, Apparently, the transaction value does not merely include the amount paid to the assessee towards price but also includes any amount a buyer is liable to pay by reason of or in connection with the sale of the goods, including any amount paid on behalf of assessee to the dealer or the person selling the vehicles. Measure of levying is expanded and its composition is broad based to bring all that a buyer is liable to pay or incur by reason of sale or in connection on therewith. Clearance of goods subject to fulfilment of sales conditions contribute to the assessable value by the amended definition of transaction value. The transaction value, therefore, is not confined to the amount actually paid and is not restricted to flow back of consideration or part thereof to the assessee directly but even for discharge of sales obligations both in present and future. It would include even the amount paid by the buyer to the dealer or the persons selling vehicles in pursuance of the contract between the dealer or the seller and the assessee in relation to or connection with the sale of the vehicles and such payment may be in the course of sale or even after sale. Thus all deferred and future considerations add to assessable value. The theory of flow back of consideration or part thereof is not confined to direct monetary benefit to the assessee in connection with the sale of vehicles but rejuvenated to include consideration integrally connected with post sale obligations also and indirect benefit received in the course of or on account of sale as well as subsequent to the sale pursuant to any service rendered by the person who sells the vehicles under the contract with the manufacturer relating to the sale of the vehicles in view of meaning of transaction value as incorporated in to the provisions of section 4(3) (d) of the Act w.e.f. 01.07.2002. Sales in such type of contracts is conceived by both parties to be complete if post sales obligation are dischargeable by settled terms known to each other making performance of contract certain.
16. The definition clause of the expression transaction value begins with the clear meaning thereof as understood under Sale of Goods Act, 1930 and further proceeds to elucidate its extensive nature, simultaneously circumscribing the excludable items therefrom. Obviously, as far as inclusive part of the definition is concerned, it is totally extensive and very wide, while the exclusion portion is completely exhaustive.
17. The definition clause defines the transaction value to be the price paid or payable for the goods when sold. It further proceeds to enumerate the factors elements which are to be included in addition to the price to determine the assessable value as the law contemplates by section 4 of the Act. It then explains that the inclusion of identified items does not mean that they are restricted or limited to those which are specifically identified. In this inclusion part of definition, the legislature has used the word any amount at two places, thereby clearly disclosing the extensive nature of the definition. Thereafter, the definition clause specifically identifies the items which stand excluded from the transaction value, which is absolutely restrictive in nature.
18. On the whole, the definition of the expression transaction value is neither restrictive in nature nor exhaustive but illustrative and inclusive. The definition clause uses terms like means, includes, including, but not limited to, and but does not include. The word includes has been suffixed by the phrase in addition to. Apparently, it is a definition of extensive nature and at the same time it is restrictive and exhaustive in relation to the items to be excluded therefrom. It discloses to be of vary wide and extensive in nature and it is evident from the use of the expressions like includes in addition to and including but not limited to. At the same time, it precisely pinpoints the items which are excluded therefrom, with the prefix as but does not include. Exclusions being defined no presumption for further exclusions is permissible since measure of levy is revenue yield base. There appears no ambiguity to say that the amendment made w.e.f. 1.7.2002 has to cover all factors/elements integrally connected with sale of excisable goods to contribute for determination of assessable value thereof.
19. If one peruses the definition clause of the expression transaction value, it refers to any amount that buyer is liable to pay. Only restriction that has been imposed is that such payment should be by reason of or in connection with the sale on such goods. Thus reason of sale and inter connection thereto are essential elements to contribute for assessable value. The definition further clarifies that any such amount is not limited to, any amount charged for . The expression any has been used twice and on both the occasions, it refers to the amount payable by the buyer. The second time use of the word any is preceded by the expression but not limited to. The said expression clarifies the definition to be totally extensive in nature and not exhaustive as far as the items referred in the definition clause after the expression but not limited to.
20. Further perusal of definition of the term transaction Value does not disclose that the elements to be included in the assessable value would depend upon direct flow back of the consideration to the assessee. Such a conception shall defeat the spirit of amendment to the law. Even indirect benefit in that regard, wholly or partly, resulting from the payment made by the buyer to the dealer in connection with or by reason of the sale transaction will have to be included in the assessable value. Being so, any amount collected by the dealer towards pre-delivery inspection or after sale services from the buyer of the goods under the understanding between the manufacturer and the dealer or forming part of the activity of sale promotion of the goods would be a payment on behalf of the assessee to the dealer by the buyer, and hence, it would form part of the assessable value of such goods. Undoubtedly, such collection of charges by the dealer could also be to the advantage of the dealer to discharge post sales obligations/liability arose under contract of sale. However, that may involve a question of profit to the dealer and may be a subject matter of assessment for the purpose of direct taxes. However, in relation to the manufacturer, it would be an indirect consideration received by the assessee in relation to the clearance of the product manufactured by him.
21. The term sale used in the definition clause should not be misunderstood as having used, otherwise than to identify the stage at which the product is cleared to the customer i.e. the buyer thereof and the price element which is to be considered for the purpose of deciding the issue relating to the assessable value of the manufactured goods. It essentially denotes the total consideration payable by the buyer for the product which is to be considered while calculating the assessable value of the goods for the purpose of determining the duty liability under the said Act. It is totally different from the liability relating to sale tax. This is apparent from the scheme of the Act as well as the intent and spirit of the Section 4 itself.
22. Section 4(1) (a) of the said Act provides that where under the said Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall in a case where goods are sold by the assessee, for delivery at the time and place of removal, the assessee and the buyer of goods are not related and the price is the sole consideration for the sale, be the transaction value. All the expressions used in this provision of law are sufficiently explained in the said section itself.
23. The expression transaction value is the guiding principle in the process of ascertaining the assessable value of a product. The sale price, being paid or payable as the sole consideration, forms the base for the transaction value. Depending upon the fact situation relating to all the factors mentioned in said section 4 of the said Act, including the agreement and the arrangement arrived at between the manufacturer and the dealer or the agent in respect of sale of the product to the buyers, and the terms and the conditions thereof, the transaction value arrived at would lead to the quantification of the assessable value of the product, which in turn will determine the duty liability of the manufacturer. In the scheme of the said Act, therefore, the concept of transaction value relates to the manufacturing cost inclusive of any other amount received or receivable directly or indirectly to make the product marketable. The manufacturing of a product and the marketability thereof are inbuilt elements of the scheme of assessable value under Section 4 of the said Act.
24. It will be worthwhile to take stock of various decisions of the Supreme Court in relation to the rules of interpretation particularly, pertaining to the definition clauses which are enhanced with the phrases like includes, including, but not limited to, any etc.
25. The Apex Court in Smt. Angurbala Mullick vs. Debabrata Mullick, reported in AIR (38) 1951 SC 293 while dealing with the mater relating to the rights of Hindu widow under Hindu Womens Right to the Property Act, 1937, referring to the expression any property in Section 3(1) thereof, had held that the said expression prima facie includes, unless something to the contrary can be spelt out from other provisions of the Act, all forms or types of interest answering to the description of heritable property in law.
26. The Apex Court in Commissioner of Income-tax, Andhrapradesh vs. Taj Mahal Hotel reported in AIR 1972 Supreme Court 168 while dealing with the issue as to whether sanitary fittings and pipelines installed in a building which was run as a hotel would fall within the meaning of the word plant in Section 10(2)(vi-b) of the Income Tax Act, 1922, held that Section 10(5) of the Act provides inter alia that in sub-section (2) the word plant includes vehicles, books, scientific apparatus and surgical equipment purchased for the purpose of the business, profession or vocation. The main argument on behalf of Income Tax department was that the word plant should not have been given a wide meaning and should have been interpreted according to the common understanding in commercial circle among persons who deal in plant and machinery. While rejecting the said contention, the Apex Court held thus:-
6. Now it is well settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of every day use. Popular sense means that sense which people conversant with the subject matter with which the statute is dealing, would attribute to it. In the present cae, S. 10(5) enlarges the definition of the word plant by including in it the words which have already been mentioned before. The very fact that even books have been included shows that the meaning intended to be given to plant is wide. The word includes is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such thing as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include. (Emphasis supplied)
27. The Apex Court in the Regional Director, Employees State Insurance Corpn. Vs. M/s. High Land Coffee Works of P.F.X. Saldanha & Sons and another, reported in AIR 1992 SC 129 while dealing with the question, as to whether factories belonging to the respondents in the said case would loose the benefit of exclusion of their factory from the applicability of the Employees State Insurance Act, 1948 on account of amendment carried out to the definition of the expression seasonal factory, took note of the exact difference between the amended and un-amended definition of seasonal factory and observed thus:-
2. Section 1(4) excludes seasonal factory from the scope of the Act. The seasonal factory is defined under S. 2(12) of the Act which is extracted hereunder:
Seasonal factory means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid process.
3. The factories of the respondents were excluded from the operation of the Act since they were declared to be the seasonal factories within the meaning of the above stated definition. There is no dispute on this aspect.
4. By Amending Act 44 of 1966 which came into force with effect from 28th January 1968, the definition of seasonal factory has been amended. The definition as amended reads:
Seasonal factory means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processed and includes a factory which is engaged for a period not exceeding seven months in a year
(a) in any process of blending, packing or re-packing of tea or coffee; or
(b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify;
The expressions manufacturing process and power shall have the meaning respectively assigned to them in the Factories Act, 1948.
Having so noted, the Apex Court held thus:-
The amendment, therefore, was clearly in favour of the widening the definition of seasonal factory. The amendment is in the nature of expansion of the original definition as it is clear from the use of the words include a factory. The amendment does not restrict the original definition of seasonal factory but makes addition thereto by inclusion. The word include in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction. The word include is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include. (Emphasis supplied.)
28. In P. Kasilingam and others vs. P.S.G. College of Technology and others, reported in AIR 1995 S.C. 1395 the Apex Court clearly brought out difference in the meaning between the terms means, means and includes and includes in the following words:-
A particular expression is often defined by the Legislature by using the word means or the word includes. Sometimes the words means and includes are used. The use of the word means indicates that definition is a hard and fast definition and no other meaning can be assigned to the expression that is put down in definition. The word includes when used, enlarges the meaning of the expression defined so as to comprehend not only such things as they signify according to their natural import but also those things which the clause declares that they shall include. The words means and includes on the other hand, indicate an exhaustive explanation of the meaning which, for the purpose of the Act, must invariably be attached to these words or expressions.
(Emphasis supplied.)
29. In M/s. Associated Indem Mechanical (P) Ltd. Vs. West Bengal S.S.I.D.C. Ltd., reported in AIR 2007 SC 788 the point which arose for consideration was whether the West Bengal Government Premises (Tenancy Regulation) Act, 1976 would apply only to the residential premises and not to other premises. The Apex Court after taking note of the preamble and the scheme of the Act, held thus:-
As the language shows, the definition of the word premises as given in Section 2(c) of the Act is a very comprehensive one and it not only means any building or hut or part of a building or hut and a seat in a room, let separately but also includes godowns, gardens and out-houses appurtenant thereto and also any furniture supplied or any fittings or fixtures affixed for the use of the tenant in such building, hut or seat in a room, as the case may be. A seat in a room or gardens or godowns by themselves do not qualify to be called a residential building. A residence ordinarily means a place where one resides; the act or fact of abiding or dwelling in a place for some time;: an act of making ones home in a place. Residential ordinarily means used, serving or designed as a residence or for occupation by residents; relating to or connected with residence. Gardens or grounds or any furniture supplied or fittings or fixtures affixed in a building or seat in a room can by no stretch of imagination be called or said to be a residential building, but they are to be a residential building, but they are included in a definition of premises. This shows that the legislature intended to give a very wide an all comprehensive definition of premises and did not intend to give it a residential meaning. The opening part of the definition of the word premises in Section 2(c) employs the word any. Any is a word of very wide meaning and prima facie the use of it excludes limitation. (See Angurbala Mullick vs. Debabrata Mullick, AIR 1951 SC 293 at 297). The definition of premises in Section 2(c) uses the word includes at two places. It is well settled that the word include is generally used in interpretation clauses in order to enlarge the meaning of the words or phrases must be construed as comprehending, not only such things, as they signify according to their natural import, but also those things which shall include. (See Dadaji v. Sukhdeobabu, AIR 1980 SC 150; Reserve Bank of India v. Pearless General Finance and Investment Co. Ltd., AIR 1987 SC 1023 and Mahalakshmi Oil Mills v. State of Andhra Pradesh, AIR 1989 SC 335). The inclusive definition of district judge in Article 236 (a) of the Constitution has been very widely construed to include hierarchy of specialized Civil Courts viz. Labour Courts and Industrial Courts which are not expressly included in the definition. (See State of Maharashtra v. Labour Law Practioners Association, AIR 1998 SC 1233). Therefore, there is no warrant or justification for restricting the applicability of the Act to residential buildings alone merely on the ground that in the opening part of the definition of the word premises, the words building or hut have been used. (Emphasis supplied)
30. In Black Diamond Beverages vs. Commercial Tax Officer reported in AIR 1997 SC 3550 = (1998) 1 SCC 458, it was held the that the definition of sale price in section 2(d) of the West Bengal Sales Tax Act, 1954 to mean money consideration for the sale and to include any sum charged for containers, etc. was construed to include freight and delivery charges paid by the seller as being within the ordinary meaning of the words money consideration for the sale though not mentioned in the inclusive part of the definition.
31. In the recent decision in the matter of Commercial Taxation Officer, Udaipur vs. Rajasthan Taxchem Ltd., reported in 2007 (209) ELT 165 (SC), while dealing with the issue as to whether diesel can be called raw material in the manufacture of polyester yarn referring to the definition of the term raw material under Section 2(34) of the Rajasthan Sales Tax Act, 1994 which defines the said term to mean, goods used as an ingredient in the manufacture of other goods and includes preservatives, fuel and lubricant required for the process of manufacture, held thus:-
The word includes gives a wider meaning to the words or phrases in the Statute. The word includes is usually used in the interpretation clause in order to enlarge the meaning of the words in the Statute. When the word includes is used in the words or phrases, it must be construed as comprehending not only such things as they signify according to their nature and impact but also those things which the interpretation clause declares they shall include. (Emphasis supplied)
32. In Yamaha Motors India Pvt. Ltd. Vs. CCE, Delhi-IV, reported in 2008 (231) ELT 677 (Tri.-Del.), the Division Bench of the Tribunal by merely referring to earlier decisions of the Tribunal in the matter of North East Gases Pvt. Ltd. Vs. Collector of Central Excise, Shillong, reported in 1998 (24) RLT 534, Philips India Ltd. Vs. Collector, Central Excise, Pune, reported in 1997 (91) ELT 540 (S.C.), Collector of Central Excise vs. Mahindra & Mahindra Ltd., reported in 1999 (111) ELT A 126 (S.C.), and Maruti Udyog Ltd. Vs. CCE, Delhi-III, reported in 2004 (170) ELT 245 (Tribunal) as well as the appellate order therein reported in 2006 (201) ELT 28, held that the settled legal position is that free after-sale service provided by the dealers to the ultimate buyers for which they are reimbursed by the assessee is not a consideration flowing from dealers to the assessee, and therefore, could not be included in the assessable value. The finding is squarely based upon the decision in the appellants own case referred to above. Surprisingly the Tribunal therein has observed that the judgment in the appellants own case was upheld by the Supreme Court in the order reported in 2006 (201) ELT 28. We have already quoted above the order of the Apex Court which clearly discloses that the appeal was dismissed, not on merits, but only on the ground that there was inordinate delay in filing the appeal. Such an order cannot be construed as amounting to upholding the decision of the Tribunal.
33. In Commissioner of Central Excise, Coimbatore vs. Texmo Industries, reported in 2008 (226) ELT 375 (Tri-Chennai), the Tribunal decided the matter merely on the basis of the appellants own case and by referring to the decision of the Apex Court in Bombay Tyres International case. The Bombay Tyre International case was related to the period prior to 1st July, 2000 i.e. prior to introduction of concept of transaction value. The decision nowhere considered the scope of transaction value.
34. The decision in Kinetic Motor Co. Ltd. vs. CCE, Aurangabad, reported in 2009 (240) ELT 734 (Tri.-Mumbai) was delivered solely on the basis of the appellants own case delivered on 16th April, 2004.
35. The decision in New Holland Fiat (India) Ltd. Vs. CCE, Mumbai-II, reported in 2009 (248) ELT 413 (Tri.-Mumbai) was an order passed in a stay application. An order delivered in an interim proceedings cannot be construed as laying down the law. Findings arrived at in such orders are for the purpose of disposal of the interim applications. They are prima facie views and that is also apparent from para 9 of the said order itself.
36. In Confident Dental Equipments Ltd. Vs. CCE, Bangalore, reported in 2009 (248) ELT 868 (Tri.-Bang.) the decision though related to the period from April, 2004 to July, 2005, the same was delivered solely on the basis of the order passed in the appellants own case without considering the scope of the term transaction value.
37. The Apex Court in Philips India Ltd. Vs. CCE, Pune, reported in 1997 (91) ELT 540 (S.C.) was dealing with the period from 1983 to 1986. The issue related to advertisement expenses and expenses on after sale services. Therein the finding of the Tribunal was that there was nothing on record to show that the expenses incurred by the dealers on those counts were reimbursed by the assessee. In that background, the decision was delivered, apart from the fact that it related to the period prior to introduction of concept of transaction value.
38. In Telco Ltd. Vs. CCE, Pune, reported in 2000 (121) ELT 224 (Tribunal) the decision was essentially on the ground that there was no flow back of additional consideration nor the arrangement between the parties discloses the dealer to be the agent of the assessee. Again the decision related to the period prior to the introduction of the concept of transaction value. The appeal against the said decision was also dismissed on the same ground.
39. In Mahindra & Mahindra Ltd. Vs. Collector of Central Excise, Bombay, reported in 1998 (103) ELT 606 (Tribunal) the Tribunal held that there was no dispute that dealers margin covered the expenses incurred by dealers for free after sale services and PDI, and therefore, no part of dealers margin which would cover such expenses was liable to be added to the assessable value. The decision again was relating to the period prior to 1985.
40. The decision of the Madras High Court in Standard Electric Appliances, Tuticorin, reported in 1986 (23) ELT 302 (Mad.) is also of no help as it related to the period much prior to the introduction of concept of transaction value.
41. Same is the case in relation to Telco Ltd. Vs. CCE, Jamshedpur, reported in 2004 (178) ELT 622 (Tri.-Mumbai).
42. The fall out of the above discussion is that the point for consideration is to be answered in affirmative in above terms and is accordingly answered.
(Pronounced on _____________________ ) (JUSTICE R.M.S. KHANDEPARKAR) PRESIDENT (DR. CHITTARANJAN STAAPATHY) TECHNICAL MEMBER (D.N. PANDA) JUDICIAL MEMBER RK 30