Per Justice R.M.S. Khandeparkar :

The point for consideration which has been referred in this matter is:-

"Whether the charges towards pre-delivery inspection and after-sale-service by dealers from buyers of the cars are to be included in the assessable value of cars in the light of the definition of "transaction value" given in Section 4(3) (d) of the Central Excise Act, 1944?"

2. The above issue has arisen for consideration on account of the order passed by the Commissioner, Delhi on 30th April, 2008, whereby the charges towards pre-delivery inspection and free services for the period May 2005 to August 2007 are ordered to be included in the assessable value and the excise duty has been demanded on such assessable value from the appellants, while it was the claim of the appellant to the contrary contending that the issue had been settled by the Tribunal's order in appellants' own case decided on 16th April, 2004, and reported in 2004 (63) RLT 373 (CESTAT-Del.)=2004 (170) ELT 245.

3. It is the case of the appellants that the definition of the expression "transaction value" contained in the statutory provision existing prior to amendment makes no difference to the legal provision subsequent to 1st July, 2002 and considering the decision in appellant's own case reported in 2004 (63) RLT 373 (CESTAT-Del.)=2004 (170) ELT 245, that in Bombay Tyre International case reported in 1983 (14) ELT 1896 and the Supreme Court order in the appellant's own case dismissing the appeal filed by the department reported in 2006 (77) RLT F11 (SC)=2006 (201) ELT 28, the issue stands concluded. Therefore, it is not open for the department to re-agitate the same and that too contrary to what has been decided earlier. On the other hand, it is the case of the department that Section 4 of the Central Excise Act, 1944, (hereinafter referred to as "the said Act") as amended w.e.f. 1st July, 2000, has incorporated the concept of "transaction value" for the purpose of assessment in place of earlier concept of "normal wholesale price" and accordingly whatever is recovered from the buyer by reason of or in connection with the sale, whether payable at time of sale or at any other time, directly or indirectly, to the manufacturer or payable on behalf of the manufacturer to a dealer including the charges for servicing and warranty, will have to be included in the assessable value. According to the respondent, the decisions sought to be relied upon on behalf of the appellants, the same either relate to the period prior to the amendment of Section 4 or pertain to the issues not relating to the matters to which the amended provisions apply and hence are of help in the case in hand.

4. We have heard, at length, the learned counsel for the appellants and learned D.R. for the respondent.

5. Before we proceed to analyse their contention in relation to the issue referred for consideration, it would be appropriate to record the undisputed facts of the case wherein the issue has arisen for the consideration.

6. The appellants are manufacturers of various types of motor vehicles classifiable under Chapter 87 of the Central Excise Act, 1985. The vehicles are chargeable to duty on ad valorem basis. Three show cause notices came to be issued to the appellants, namely show cause notice dated 22nd May, 2006 in relation to the period from May, 2005 to March, 2006, another dated 7th May, 2007 in relation to April, 2007 to February, 2008 and third one dated 19th November, 2007 in relation to the period of November, 2006 to August, 2007. The said show cause notices were issued on the ground that dealership agreement entered into between the appellants and their dealers provided for various terms and conditions which included provision for servicing and warranty including free service and the same disclosed the services to be rendered by the dealers which revealed provision for after sale service, the consideration for which was sought to be absorbed in the dealers margin but was deci