ORDER
Harish Chander, President
1. Partap Steels Ltd. has filed an appeal being aggrieved from the order passed by the Collector of Central Excise (Appeals), New Delhi. Simultaneously, a stay application duly supported with an affidavit was also filed. Shri V. Lakshmi Kumaran, the learned advocate pleaded that the disputed amount is Rs. 1,57,663.15 and the dispute is about inclusion of Rs. 2000.00 which are charged by the appellant Irom the dealer at the time of sale on account of service charges. Service is to be performed by the dealer and after the satisfaction of the customer for the service, the said amount of Rs. 2000.00 is returned by the manufacturer to the dealer and the service charges are incurred by the dealer. He pleaded that the matter is covered fully in favour of the applicants by an earlier decision of the Tribunal in the case of Eicher Motors Ltd. v. Collector of Central Excise . He pleaded that in case the applicants are desired to deposit the duty amount of Rs. 1,57.663.15, it will amount to undue hardship as the applicants have prima facie a very good case on merits.
2. Shri Ram Parkash, the learned SDR, on the other hand, pleaded that there is an earlier decision of the Tribunal in favour of the revenue in the case of Standard Motor Products India Ltd. v. Collector of Central Excise where the Tribunal has ordered the inclusion of the service charges recovered from the dealers. Shri Ram Parkash, the learned SDR also referred to Collector (Appeals)’s order where he has made an observation that the inclusion of Rs. 2000/- towards service charges in the assessable value of the goods is justified. He pleaded that the revenue has got a good case on merits and as such, the stay application should be rejected.
3. In reply, Shri V. Lakshmi Kumaran, the learned advocate pleaded that the decision of the Standard Motor Products India Ltd. is not applicable to the facts in the present matter, as in the case of Standard Motor Products India Ltd., there were two separate classes of buyers, one was civilians through dealers and the other were D.G.S. & D. and the sales were directly from the factory and as such it is not applicable. He pleaded for the grant of stay.
4. We have heard both the sides and have gone through the facts and circumstances of the case. We have duly considered the judicial pronouncements of the Tribunal in the case of Standard Motors Products India Ltd. v. Collector of Central Excise and later decision of the Tribunal in the case of Eicher Motors Ltd. v. Collector of Central Excise . Eicher Motors’ decision is a later decision. The facts of the case in the case of Standard Motor Products India Ltd. are different from the facts of the present matter. The facts of the present matter are similar to Eicher Motors’ decision . Para No. 13 from the said judgment is reproduced below:-?
13. It is an admitted fact that the appellants are paying duty in respect of the Security Deposit which was not reimbursed to the Authorised Representative. It is also an admitted fact that these services are optional. It is also not disputed that the amount of Rs. 2000 represents the cost of material used in servicing the vehicle. It is also not disputed that the said amount is deposited by the customer with the appellants and the appellants reimburse the same as per the Circular to the Authorised Representative. Admittedly, this amount of Rs.’2000 does not enter the pocket of the manufacturer. Secondly, it does not relate to the manufacture of the goods. On the other hand, it relates to the cost of material which have to be used for servicing the vehicle. The materials are not manufactured by the appellants. They are independently obtained by the authorised representatives and the authorised representatives utilise them in servicing the vehicle. The amount of the cost of material determined approximately at Rs. 2000 is paid by the customer to manufacturer. The reason according to the appellants and not disputed for deducting the amount as security deposit is to ensure effective service of the vehicle by the authorised representatives as they have entered into the market recently. Therefore, the amount that is reimbursed to the authorised representatives in respect of the cost of the material is not liable to be included in the assessable value as it has no nexus to the manufacture of the goods, namely, Light Commercial Vehicles. We are, therefore, of the view that the appellants are entitled to claim deduction to the expenses/reimbursement made to the Authorised Representatives from out of the amount of Security Deposit deposited with them by the customers.
A perusal of the above decision shows that the matter appears to be covered by the decision in the case of Eicher Motors Ltd. Since the matter is subjudice, further observations at this stage will not be proper. We are of the view that prima facie the applicants have got a good case on merits. Accordingly, we dispense with the pre-deposit of the duty amount of Rs. 1,57,663.15 in view of the decision of the Delhi High Court in the case of Uptron Powertronics v. Collector of Central Excise, Meerut . We further order that during the pendency of the appeal, the revenue authorities shall not pursue the recovery proceedings.
Pronounced and dictated in open court.