1. This appeal is directed against the order of the Appellate Collector of Central Excise, Bombay dated 25th August, 1976. Originally it was preferred as a revision application before the Central Government but on transfer to this Tribunal; tile same is being, disposed of as an appeal.
2. At the relevant time, the appellants were manufacturing air-conditioners of different capacities. They were selling these air-conditioners through two modes of sale, namely, (1) sales to the dealers; and (2) sates to the DGS&D. The present appeal relates to valuation in respect of sale to dealers. It is the appellants' case that they were asked' to file their price-list in proforma V which they did under protest. Under column 5 of the price-list, which is meant for showing deductions claimed from the price specified in column 3 ibid, a sum of Rs. 550/- was shown as "Dealers Coverage" in respect of items 1 and 2 and Rs. 650/- in respect of items 3 & 4. It is the appellants' contention that the entire amount of Rs. 550/- or Rs. 650/-, as the case may be, was in the nature of a trade discount although it had been described in the price-list as dealers coverage. It was contended by the learned counsel for the appellants that the Supreme Court has held vide its recent judgment [1983 ELT 1896 (SC)] read with Court's clarificatory order dated November 14/15, 1983 that discount allowed in the trade, by whatever name this discount is described, should be allowed to be deducted from the sale price. He further submitted that in the light of this finding of the Supreme Court, the-entire amount of Rs. 550/-and Rs. 650/- should be allowed to be deducted from the sale price for arriving at the assessable value of the goods. However, when asked to indicate as to how this figure of Rs. 550/- and Rs. 650/- had been arrived at, the learned counsel was not able to show to us any communication or document showing the break-up of this amount or how it had been worked out. Only before the lower authorities it was alleged that out of this amount of Rs. 550/- and Rs. 650/-, a sum of Rs. 300/- constituted as charges for the maintenance and repair of the airconditioners for one year i.e. expenses towards after-sales service.
3. Shri Mahesh Kumar, the teamed representative for the respondent, drew our attention to the Supreme Court judgment (supra) wherein in paragraph 49, their lordships have given a clear finding that expenses incurred for after-sales service cannot be allowed to be deducted from the selling price for arriving at the assessable value of the goods.
Since the appellants had taken a clear stand before the lower authorities that Rs. 300/- represented expenses for after-sales service, Shri Mahesh Kumar contended that the same should be held to be includible in the assessable value of the goods. Referring to Shri Haksar's contention that the expenses were in the nature of a discount, Shri Mahesh referred to the following portion from the order of the Appellate Collector :- "Dealers margin includes Rs. 300/- as the charges for the maintenance and repair of machine far one year. This service is different from and independent of the warranty service." Shri Kumar, therefore, contended that in the light of the Supreme Court's decision, the appellants have no case.
4. As stated earlier, the learned counsel for the appellants has drawn our attention to the clarification given by the Supreme Court while construing the expression 'trade discount'. It is true that the Court has held that discount allowed in the trade should be allowed by whatever name such discount is described. However, this finding has been Airther elaborated by the Court and for this purpose, we reproduce below the relevant portion of the judgment :- "Discount allowed in the Trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods." (emphasis supplied) Thus, the Supreme Court has laid lot of stress on the fact that trade discount to be treated as such must stand the test of established practice of the Trade and commerce. We find ourselves unable to accept the contention of the learned counsel for the appellants that after-sales service charges could be treated as a discount, in the light of the guidelines set out by the Supreme Court. For all these reasons, we are unable to agree with the contentions put forth by the learned counsel for the appellants.
5. For the reasons stated above, we find no merit in this appeal and dismiss the same.