Case Law Details
Skoda Auto Volkswagen India Private Limited Vs Commissioner of Central Excise (CESTAT Mumbai)
Facts- The short issue involved in the present case is that whether the cost of Pre-delivery Inspection (PDI) and After Sale Service (ASS) charges required to be included in the assessable value of the motor vehicles sold by the appellant to the dealers, when these charges/expenditure are incurred by the dealers from their profit margin.
Conclusion- Held that the issue is already decided in the assessee’s own case that the said charges cannot be included in the assessable value of the motor vehicles.
FULL TEXT OF THE CESTAT MUMBAI ORDER
The short issue involved in the present case is that whether the cost of Pre-delivery Inspection (PDI) and After Sale Service (ASS) charges required to be included in the assessable value of the motor vehicles sold by the appellant to the dealers, when these charges/expenditure are incurred by the dealers from their profit margin.
2. We have heard both sides.
3. We find that the issue is no longer res integra as in the appellant’s own case this Tribunal vide Order No. A/8756387565/2018 dated 24.09.2018 decided the issue that the said charges cannot be included in the assessable value of the motor vehicles. The order is reproduced below:-
“Heard both sides.
2. Two appeals are filed by the assessee and one by the Revenue against the respective orders, since involve common issue, are being taken up together for disposal.
3. The short issue involved in the present appeals for determination is whether the cost of Pre-Delivery Inspection (PDI) and After Sales Service (ASS) charges are required to be included in the assessable value of the motor vehicles sold by the appellant to the dealers; when these charges/expenditures are incurred by the dealers from their profit margin.
4. Both sides fairly agree that the issue is covered by the judgment of Hon’ble Supreme Court in the case of Commissioner of Central Excise, Mysore Vs. TVS Motors Co. Ltd. – 2016 (331) ELT 3 (SC). Their Lordships considering the issue in the context of amended Section 4 of Central Excise Act, 1944 w.e.f. 1.7.2000 observed as follows: –
“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.”
5. In view of the above ratio, the Pre Delivery Inspection (PDI) and After Sales Service (ASS) charges cannot be included in the assessable value of the motor vehicles. In the result, the assessee’s appeals are allowed and Revenue’s appeal is dismissed.”
4. From the above order of this Tribunal the issue stand settled in favour of the appellant. Accordingly, the impugned order is set aside and the appeal is allowed.
(Dictated and pronounced in the open court)
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