Per M.V. Ravindran - These two appeals are directed against the orders-in-appeal No. 27/2007 dt. 31.7.2007, and No. 113/2008-CE dt. 28.2.2008.

2. The relevant facts that arise for consideration are:-

The appellants are manufacturers of dental equipment falling under chapter 90184900/94021000/90221300 of Central Excise Tariff Act, 1985. During the departmental audit conducted on 9.8.2005, based on the records for the period April, 2004 to July, 2005 an objection was raised alleging that the discount allowed to goods sold through dealers includes the charges incurred for rendering service to such goods sold through dealer and part of such discount allowed to dealers is to be treated as part of assessable value and duty at the appropriate rate to be paid. It was also alleged that valuation should be carried out under Rule 6 of Valuation Rules 2000 and not under Section 4 (1) (a) of Central Excise Act, 1944. A show cause notice was issued demanding duty, interest and penalty after re-determining the assessable value by including the discount allowed to the dealers. The show cause notice was adjudicated and duty demand was confirmed vide order-in-original No. 9/2006 dt. 22.9.2006. Aggrieved by such an order, the appellant preferred an appeal to the Commissioner (Appeals) in both these appeals. Ld. Commissioner (Appeals) after considering the oral and written submissions made by the appellant herein came to the conclusion that the discounts offered by the appellant to the dealers is nothing but consideration given by them in the form of warranty services effected by the dealers to their customers. It is also the finding that the discount given from the total price will form as apart of money value of consideration for sale. It was also held that this has to be included in the transaction value in terms of Rule 6 of Central Excise Valuation (Determination of prices of excisable goods) Rules, 2000. Hence these appeals.

3. Since both the appeals are of the same assessee and issue involved is also being same, they are being disposed of by a common order.

4. The Ld. Chartered Accountant appearing on behalf of the appellant would submit that the impugned order is passed on the grounds that after sales services provided by the dealers are provided at the behest of the appellants. It is the submission that this is incorrect. He would submit that the impugned order is erroneous as it has not considered the submission that the dealers rendered after sales service during the warranty period on their own. It is also his submission that the facts in this case are similar to that of the case in the Maruti Udyog Ltd. Vs. CCE, 2004 (63) RLT 373 (CESTAT-Del.)=2004 (170) ELT 245 (Tri.). He would submit that both the lower authorities have erred in applying the provisions of Central Excise Valuation Rules, 2000 in a case where it was not warranted. He would submit that the issue in this case is also covered by the decision of the Hon'ble Supreme Court in the case of M/s. Philips India Ltd., 1997 (19) RLT 471 (SC)=1997 (91) ELT 540 (SC), though the said judgment was given in the context of old Section 4.

5. Ld. Jt. CDR on the other hand would defend the impugned orders on the ground that the appellant herein was giving discount to the dealers and where the services are rendered by the said dealers. It is her submissions that the appellant herein was also engaging free lancers for servicing the said equipments and paying them 4% of the list price as remuneration. It is her submission that this would indicate that the discount offered to the dealers would include this amount of 4% as is given by the appellant to the free lancers for doing the servicing. She would submit that the provisions of Section 4 (1) (b) will be applicable as prices is not the sole consideration for the sale of the machinery.

6. We have considered the submissions made at length by both the sides and perused the records. The issue involved in this case is regarding the includability