Circular No 681/ 72 /2002-CX.
12th December 2002.

F.No.6 / 27 /2001-CX.I
Government of India
Ministry of Finance
(Department of Revenue)

Subject:- Inclusion of PDI and cost of after sales services in the assessable value of the vehicle.

I am directed to invite your attention to Board’s Circular No. 355/71/97-CX dated 19.11.97 and subsequent Circular No. 435/1/99-CX dated 12.1.99 on the subject noted above.

2. The appeal filed by the Board against CEGAT Judgement in the case of M/s.Mahindra & Mahindra Ltd. [1998 (103) ELT 606 (T)] alongwith similar matters in the case of M/s.Hindustan Motors Ltd. [1998 (101) ELT 198 (T)] and M/s.Escorts Tractors Ltd. [1999 (078) ECR 342 (T)] have been dismissed by the apex court on 27.1.2000.

3. Apart from the above three cases all other department’s appeals ( list enclosed) before the Supreme Court on this issue have also been dismissed either on merits or otherwise.

4. In view of the above facts Board withdraws Circular No. 355/71/97-CX dated 19.11.97 and subsequent Circular No. 435/1/99-CX dated 12.1.99 referred to above. In other words, PDI (Pre-Delivery Inspection) and free after sales service provided by the dealer of vehicle, during the warranty period will not be included In the assessable value.

5. The withdrawal of these Circulars will apply to past cases only as the provisions of the new section 4 introduced w.e.f. 1.7.2000 were not the subject matter of dispute before the Apex court. Moreover, for the period from 01/7/2000, the Board has already clarified the position regarding PDI and free after sale service vide Sl. No. 7 of Circular No.643/34/2002-CX dt.1/7/2002.

6. This Circular may be brought to the notice of the field formations.

7. Suitable Trade Notice be issued for the benefit of the Trade.

8. Hindi version will follow.

9. Receipt of these instructions may be acknowledged.

POSITION OF APPEALS FILED ON THE ISSUE OF PDI AND AFTER SALES SERVICE CHARGES
AND DECISIONS OF THE SUPREME COURT

SlNo..

PARTY`S NAME / CEGAT ORDER No.

F.NO./C.A.NO.

OUTCOME OF APPEAL IN SUPREME COURT

01

MAHINDRA & MAHINDRA & MARUTI UDYOG LTD./ 191-197/98-A
DT. 13-02-98

383/18/98-JC/ 4881-87/98

One line order dated 15.3.99 `Civil appeals are dismissed“ (appeal dismissed at admission Stage).

02

HINDUSTAN MOTORS

LTD./

344/98-A

DT.03-03-98

383/25/98-JC/

4165/98

Appeal dismissed vide detailed combined order

dated 27.1.2000. “Additional collector of Central

Excise Mumbai-II Vs.Mahindra and Mahindra.“

03

HERO HONDA MOTORS

LTD,/

719/98-A

383/32/98-JC/

1064/99

Dismissed vide common order in the case of CCE

Delhi Vs. Pratap Steel dated 18.1.2001. The Court

in this order clearly stated that “the Tribunal was

right in following the judgement of this Court in

Philips India ltd. Vs. CCE

Pune (1997(6) SC-31)“

04

M/S.PRATAP STEEL LTD./

878/98-A

DT.25.6.98

383/47/98 JC/

D 19871/98

CA NO. 2207/99

-DO-

05

-DO-

783-739/98-A

DT. 13.5.98

383/48/98-JC/

D-8981/99

Dismissed on 23.7.99 on the ground of delay.

06

-DO

988-89/98-A

DT. 15.7.98

383/55/98-JC/

2905/99

As at 3 above

07

M/S.ESCORTS TRACTORS

LTD./

1042/98-A

DT. 31.7.98

383/58/98-JC/

2905/99

As at 2 above

08

MAHINDRA & MAHINDRA

LTD./

998/98-A

383/62/98-JC/

D 3132/

2206/99

As at 2 above

09

M/S.ESCORTS TRACTORS

LTD./

755/98-A

DT. 15.5.98

383/1/99-JC/

D 8643/99

Dismissed on 14.7.99

One line order “Civil appeal dismissed“.

10

M/S.PRATAP STEEL LTD./

734/98-A

DT. 5.5.98

383/11/99-JC/

3637/99

One line order of dismissal dated 13.7.99.

11

PUNJAB TRACTORS LTD. /

115-116/99-A

DT. 5.2.99

383/21/99-JC/

D 9016/99

Dismissed on 9.8.99

12

M/S. P.N.DHOOT

INVESTMENT CO. LTD.

C-II/261-262/

WZB/99

DT. 28.1.99

387/51/99-JC/

D 8683/99

Dismissed

13

M/S. TELCO LTD.

C-II/1380/2000-WZB

DT.8.5.2000

387/289/2000

JC/

53/2001

Dismissed on 13.3.2001

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