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2023 (11) TMI 370 - AT - Central ExciseValuation - inclusion of after sale service charges, reimbursed by the appellants to their dealers, in the assessable value - providing free service to the customers during the warranty period and the expenses are reimbursed by the appellants to the dealers - HELD THAT:- Though, the appellants and the Adjudicating Authority have considered the “reimbursed expenses” as the demand on the includability of post-delivery inspection charges and after sale service charges, no clarity as to what the reimbursed expenses constitute is given in the show-cause notice. The Show Cause Notice makes a bland and general averment, in Para 2 of the show-cause notice, that it is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer’s margin (or reimbursed to him). It is also not made clear, in the show-cause notice, as to whether the amounts reimbursed, by the appellants to their dealers, were towards PDI and ASS. Moreover, the show-cause notice seeks to demand duty on the expenses, understandably incurred by the appellants, reimbursed to the dealers. It is beyond imagination as to how these amounts constitute flow of additional consideration unless it is evidenced either that the appellants are allowing the dealers to collect the margin payable, by the appellant to the dealers, from ultimate customers or that the additional amounts charged by the dealers from ultimate customers is actually flowing back to the appellants. Only under these two conditions the said expenses can be held includable in the assessable value even under the old or amended definition of Section 4 of CEA, 1944 - there is no provision either under Section 4 of the CEA, 1944 or under the Valuation Rules thereof to include an amount which flows out from the manufacturer to their customers. It is not the case of the Department that the appellants, instead of reimbursing the expenses on account of PDI and ASS, allowed the dealers to recover the same from the customers or that the appellants have received some amounts as extra consideration under these Heads. It is not forthcoming from the show-cause notice or from the records of the case that the amount recovered by the dealers over and above the listed price sanctioned by the appellants is towards the amount reimbursable by the appellants to the dealers. It is also not established that the amount extra collected is towards the PDI and ASS. There is no evidence to prove that the amount charged extra by the dealers is flowing back towards the appellant - the impugned order as well as the arguments of the learned Authorized Representative and to some extent, argument of the Counsel also is beyond the scope of the show-cause notice. No case is made for the inclusion of “after sale expenses reimbursed to the dealers by the Noticee” except for a bland averment in Para 2 of the show-cause notice that it is a well-known fact in case of motor vehicles manufacturers that After Sales service and pre-delivery inspection (PDI) are services provided free by the dealer on behalf of the assessee, the cost towards this is included in the dealer’s margin (or reimbursed to him). Thus, it is not made clear in the show-cause notice as to whether these expenses reimbursed by the appellants were towards PDI and ASS - the impugned order cannot be sustained - appeal allowed.
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