Case Law Details

Case Name : Commissioner of Central Excise Vs. Hero Honda Motors Ltd. (Supreme Court)
Appeal Number : [2015 (64) taxmann.com 270 (SC)]
Date of Judgement/Order :
Related Assessment Year :

CA Bimal Jain

CA Bimal JainFacts:

Hero Honda Motors Ltd. (the Respondent) was engaged in the manufacturing of motorcycles and has been paying the Excise duty at ad valorem basis. The Department has alleged that the Respondent had not declared correct value of motorcycles in price lists as the Respondent was taking a deposit of Rs. 500 per motorcycle at the time of booking of motorcycle from the customers and that deposit was an additional consideration.

Period Involved: Year 1985-86 to 1990-91

Held:

The Hon’ble Supreme Court after considering every aspect of the issue examined by the Tribunal has observed that the price of motorcycle manufactured by the Respondent were market driven and the Respondent did not follow cost of production plus reasonable profit pricing policy. Hence, deposit was not a relevant factor in pricing and thereby, any income in the form of interest, etc., arising from the use of deposit amount will not form part of the excisable value.

(Author can be reached at Email: bimaljain@hotmail.com)

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