This will be the second appeal by the department before the Supreme Court. The department recently filed an appeal against Cegat's order which, too, had set aside charges of excise evasions against Maruti Udyog and Mahindra & Mahindra (M&M).

Senior department sources were of the view that the Cegat decision could have far-reaching consequences in assessing the excisable value of two-wheelers and automobiles.

The issue pertains to whether the cost of the three after-sales services provided by the dealers of the manufacturer should be included in the assessable value of the motorcycles.

The central excise authorities had alleged excise evasion by the company running into several lakhs and registered the case almost 10 years ago.

Significantly,based on its earlier decision in the Maruti and M&M case, Cegat has ordered in the Hero Honda case that the cost of free after-sales service would not be part of the assessable value. According to sources, the order, if unchallenged, could result in similar decisions in a number of cases, causing recurring revenue losses. In fact, the tribunal has already followed its decision on M&M and Maruti case in a number of subsequent cases, sources added.