The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the excise duty demand in favor of Suzuki Motorcycle and held that no post-delivery inspection charges would be included in the assessable value for purposes of paying excise duty.
Suzuki Motorcycle India Private Limited, the appellant assessee engaged in the manufacture and sale of two-wheelers and parts thereof through their dealers who are appointed under a Dealership Agreement; the assessee sells their final products at ex-factory prices to their dealers who further sell to the ultimate customers after including dealers margin.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand of Rs.1,31,15,550/- along with interest and equal penalty.
Krati Singh, the counsel for the assessee contended that the cost of after-sale service is not includable in the assessable value, and such expenses are incurred by the dealers after the appellant has sold his goods to the dealers; the dealer thereafter provides the service to the customers, in terms of the dealership agreement, and incurs expenditure; therefore, it cannot be added back to the sale price charged by the manufacturer from the dealer for computing the assessable value.
Rajeev Gupta, the counsel for the department contended that the valuation of the goods in the instant case was not covered under Section 4 (1) (a) of the Central Excise Act,1944 but was covered under Section 4 (1) (b) read with Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
The Bench observed that in the case of General Motors India Pvt. Ltd, the court held that PDI charges and free ASS charges would not be included in the assessable value under Section 4 of the Central Excise Act to pay excise duty.
The two-member bench comprising S S Garg (Judicial) and Anjani Kumar (Technical) held that the assessee was not liable for the demand raised by the department while allowing the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
