Full Judgment
Cost of form Rs. 1,42,387.47 -------------------------------------------- 3. The applicant has submitted that the demands made on the aforesaid grounds are not justified at all as addition to the price or inclusion in the assessable value of any of the aforesaid costs is not legally tenable. They have submitted that demand of over Rs. 6.31 lacs on excess recovery of insurance charges is wholly unjustified as the short recovery on transportation charge is to be adjusted against excess recovery on transit insurance. Further freight and transit insurance fall outside the purview of the excess levy. The inclusion of excess recovery to the transit insurance is also totally contrary to the law declared by the Supreme Court in the case of Baroda Electric Meters v.Collector of Central Excise -1997 (94) E.L.T. 13 (S.C.). They have submitted that demand of over Rs. 5.6 lacs on account of salary of Field Service Engineers also is not justified as these persons were not employee of the applicants at all. The applicants were only subsidising the salaries of Field Service Engineers employed by the Authorised Representatives. The applicant also submits that demand of over Rs. 3.1 lacs made on account of monsoon packing is not at all justified as monsoon packing was supplied only on scooter and sales to Dealers have been without monsoon packing. The demand of over Rs. 1.1. lacs made towards shared advertising expenses is also totally against law and this is contrary to the decision of the Supreme Court in the case of Philips India Ltd. v. C.C.E. -1997 (91) E.L.T. 540. The demand of over Rs. 9.1 lacs towards redemption charges is totally unjustified as the same was levied only in case of lifting of the scooters beyond the grace period of 24 to 28 days. The inclusion of this amount is contrary to law declared by the Supreme Court in the case of Government of India v. Madras Rubber Factory Ltd. - 1995 (77) E.L.T. 433 and also Circular No. 136/47/95-CX, dated 12-7-1995 of the Central Board of Excise & Customs. The inclusion of Rs. 25/- per scooter of pre-registration check charges carried out by the Authorised Representative was also totally incorrect and is contrary to law. This is a post-removal cost and the same is clearly excludible in terms of the decision of the CEGAT in the case of Escorts Ltd. v. C.C.E. -1998 (98) E.L.T. 206 which decision was given in an identical case.
4. In addition to the aforesaid submissions on the merit of the demands, the appellants have also submitted that invoking of the extended period as provided under the proviso to Section 11A is totally unjustified in the facts of the case. The applicant also submits that a refund of over Rupees four lacs is due to the applicants from the Commissioner on account of the re-assessment of his scooter in the light of the CEGAT's Order Nos. 507-508/98-A, dated 30-3-1998.
5. While defending the Order in adjudication learned SDR fairly conceded that legal position as emerging from the decisions of the Supreme Court and the CEGAT is in favour of the applicants, particularly with regard to levying duty on excess recovery of insurance shared advertising cost, retention charges and pre-registration check charges.
6. We have perused the record and have also considered the submissions made by both the sides. The applicants have a very strong prima facie case in respect of most of the grounds of demand. They are also entitled to refund on account of the re-assessment of the scooters manufactured by them in the light of CEGAT's Order Nos. 507-508/98-A dated 30-3-1998.
In the light of these, the pre-deposit of duty and penalty are waived and recovery stayed during the pendency of the appeals.