K.L. Rekhi, Member (T)

1. The point in dispute is whether (1) the dealers' margin of Rs. 550/- per motor cycle and (2) freight and insurance should be deducted from the sale price of motor cycles manufactured by the Respondents in order to arrive at their assessable value under Section 4 of the Central Excises Salt Act, 1944.

2. The dispute relates to the initial period from October-November 1985 to the 2nd February 1986. The Respondents commenced manufacture of Yamaha RX-100, 100 CC motor cycles during October-November 1985. They did not appoint wholesale dealers/distributors straightaway for marketing these motor cycles. The initial pattern of sale of the motor cycles as contained in the Respondents' letter dated 7-10-1985 addressed to the Superintendent of Central Excises, and as" amplified later during the course of hearing before us, was as follows :-

The Respondents advertised for Yamaha RX-100, 100 C.C motor cycles for booking orders directly from the public. Individual customers from the public contacted the dealers appointed by the respondents for booking orders. These dealers booked orders from customers on payment of deposit of Rs. 1000/- per motor cycle. The custome