R.Y. Ganoo, J.

1. Rule. Rule made returnable forthwith. Learned Counsel Mr. Jetly waives service on behalf of the respondents. By consent, petition is taken up for final disposal.

2. By this petition, the petitioners are seeking following reliefs.

“(i) Clause No.7 of the circular bearing No. 643/34/2002-CX dated 1st July, 2002 issued by the respondents to the extent it states that cost of PDI and free after sales services incurred by the dealers are includable in the assessable value of the vehicles be quashed and set aside.

(ii) The Circular No. 681/72/2002-CX dated 12th December, 2012 issued by the respondents be quashed so far as it relates to the period after 1st July, 2000.

(iii) The order in original dated 5th December, 2011 passed by respondent no.2 by which it is held that cost of PDI and free after sales services have to be included in the assessable value of the vehicles sold by the petitioners be quashed and set aside.

(iv) The judgment delivered by the CESTAT in the case of Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi III reported at 2010 (257) ELT 226 (Tri-LB) be declared as incorrect and invalid in law.

(v) Writ of mandamus be issued thereby directing respondent no.2 by himself, his subordinates, servants and agents to withdraw and / or cancel the impugned order in original dated 5th December, 2011 passed by respondent no.2.

(vi) Restrain the respondents from taking any further proceeding or steps in furtherance and or in implementation of the impugned order in original dated 5th December, 2011 passed by the respondent no.2.”

3. However, at the hearing of the Petition, Counsel for the petitioners has restricted his arguments regarding the validity of the impugned Circular dated 1st July, 2002 and 12th December, 2012. Hence, the only question to be considered in this Writ Petition is whether clause no.7 of the Circular bearing No. 643/34/2002-CX dated 1st July, 2002 read with Circular No. 681/72/2002-CX dated 12th December, 2012 to the extent they state that cost of pre delivery inspection and free after sales services incurred by the dealers are includable in the assessable value of the vehicles is violative of the provisions of the Central Excise Act, 1944?

4. Few facts necessary for the disposal of this petition are as under. The petitioners manufacture Indica / Indigo cars at Pimpari works. These cars are sold to customers through a countrywide network of dealers. From August, 2008 onwards the petitioners sold the said cars to their subsidiary company M/s. TML Distribution Company Ltd. (For short “M/s. TMLD”) who in turn sell the vehicles to dealers. The petitioners have already disclosed that M/s. TMLD is related person and have paid excise duty not on the basis of petitioners' sale price to M/s. TMLD but on the basis of price of M/s. TMLD to the dealers. The petitioners have thus paid duty on 'normal transaction value' i.e. the price at which aggregate quantity of the cars is sold by M/s. TMLD to dealers. The petitioners claim that there is no dispute between the parties that the petitioners have correctly paid excise duty on this basis. The petitioners have appointed various persons as dealers who sell the cars in turn to their customers.

5. Between the petitioners and each dealer, an agreement is executed thereby appointing such a person as a dealer on terms and conditions mentioned in the said agreement. According to the petitioners, the petitioners decide the maximum price at which the dealer has to sell the car. On account of this, the dealer cannot sell the car for an amount more than the one which is specified by the petitioners. The dealer pays to the petitioners a particular price quoted by the petitioners and according to the petitioners it is that price on which excise duty is paid. According to the petitioners that is the price which will have to be termed as assessable value. According to the petitioners on account of the dealership agreement, the dealer is required to c