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TMI Blog2013 (1) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;The appellant is engaged in the manufacture of automobiles. They sell automobile produced by them to the dealers under dealership agreement on ex-factory price. Under the agreement the dealer is entitled to sell automobile in retail to the customers subject to maximum price sealing fixed by the appellant. The dealers however can sell automobile to the customers at a price lower than the maximum price. Under the dealership agreement the dealer is under obligation to ensure pre-delivery inspection of the vehicle and also provide three free services to the retail customers at his own cost. The Department being of the view that the cost of the pre-delivery inspection and three free after-sale services incurred by the dealer was actually incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e excise duty on the transaction value in terms of Section 4 of the Central Excise Act, 1944. It is contended that the jurisdictional Commissioner(Adjudication) has committed an error in including the cost of free pre-delivery inspection and three free services incurred by the dealers in the transaction value ignoring the fact that those free services were required to be provided by the dealer under dealership agreement and that the cost of those services was in-built in the price charged for sale of the vehicle to the dealer on principal to principal basis. Ld. counsel also submitted that the jurisdictional Commissioner (Adjudication) has failed to appreciate that no amount of money flowed back from the dealer to the appellant directly or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perused the material on record. It is undisputed that the appellant during the period in question cleared the cars manufactured in their factory to respective dealers on principal to principal basis and paid excise duty as per price charge from the dealers. It is not in dispute that the sale of the cars to the dealers was subject to dealership agreement which contain an obligation on the dealer to provide free pre-delivery inspection and three free services to the ultimate customer of the car. On perusal of the copy of the sample dealership agreement placed on record by the appellants, we find that it is a comprehensive agreement providing for rights and obligation of the dealer and as per agreement one of the conditions for the dealers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it related to the period prior to introduction of concept of transaction value. 39. In Mahindra & Mahindra Ltd. v. Collector of Central Excise, Bombay, reported in 1998 (103) E.L.T. 606 (Tribunal) the Tribunal held that there was no dispute that dealer's margin covered the expenses incurred by dealers for free after sale services and PDI, and therefore, no part of dealer's margin which would cover such expenses was liable to be added to the assessable value. The decision again was relating to the period prior to 1985. On reading of the above, we find that the Larger Bench has refrained from following the law laid down by the Apex Court in the matters of Philips India Ltd. (supra) and Mahindra & Mahindra Ltd. (supra) mainly on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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