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Inclusion of PDI and Cost of After Sales Services in the Assessable Value
of the Vehicle
Central
Excise Circular No. 681 dated 12th December 2002
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. 355/77/97-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
01/07/2000, the Board has already clarified the position regarding PDI and free
after sale service vide Sl. No. 7 of Circular No. 643/34/2001-CX dated
1/7/2002-CX.
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.
POSITION
OF APPEALS FILED ON THE ISSUE OF PDI AND AFTER SALES SERVICE CHARGES AND
DECISIONS OF THE SUPREME COURT
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S.
No.
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PARTY�S
NAME/ CEGAT ORDER NO.
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F.
NO./ C.A. NO.
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OUTCOME
OF APPEAL IN SUPREME COURT
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01
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Mahindra
& Mahindra & Maruti Udyog Ltd. 191-197/98-A Dt. 13-02-98
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383/18/98-JC/4881-87/98
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One
line order dated 15.3.99 `Civil appeals are dismissed� (appeal dismissed
at admission Stage)
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02
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Hindustan
Motors Limited 344/98-A DT 03-03-98
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383/25/98-JC/4165/98
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Appeal
dismissed vide detailed combined order dated 27.1.2000 �Additional
collector of Central Excise Mumbai-II Vs. Mahindra and Mahindra�
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03
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Hero
Honda Motors Ltd./719/98-A
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383/32/98-JC/1064/99
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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)�
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04
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M/s
Pratap Steel Ltd./ 878/98-A Dt. 25.6.98
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383/47/98
JC/D 19871/98CA No. 2207/99
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-DO-
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05
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-DO-783-739/98-ADt
13.5.98
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383/48/98-JC/D-8981/99
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Dismissed
on 23.7.99 on the ground of delay.
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06
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-DO-
988-89/98-A Dt. 15.7.98
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383/55/98-JC/2905/99
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As
at 3 above
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07
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M/s
Escorts Tractor Ltd./ 1042/98-A Dt. 31.7.98
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383/58/98-JC/2905/99
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As
at 2 above
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08
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Mahindra
& Mahindra Ltd./ 998/98-A
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383/62/98-JC/D
3132/ 2206/99
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As
at 2 above
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09
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M/s
Escorts Tractors Ltd./ 755/98-A Dt 15.5.98
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383/1/99-JC/D
8643/99
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Dismissed
on 14.7.99 One line order �Civil appeal dismissed�
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10
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M/s.
Pratap Steel Ltd./734/98-A Dt. 5.5. 98
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383/11/99-JC/3637/99
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One
line order of dismissal order 13.7.99.
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11
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Punjab
Tractors Ltd. 115-116/99-A Dt. 5.2.99
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383/21/99-JC/D
9016/99
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Dismissed
on 9.8.99
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12
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M/s
P N Dhoot Investment Co. Ltd. C-II/261-262WZB/99Dt. 28.1.99
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387/51/99-JC/D
8683/99
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Dismissed
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13
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M/s
Telco Ltd C-II/1380/2000-WZBDt. 8.5.2000
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387/289/2000
JC/53/2001
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Dismissed
on 13.3.2001
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