2009 (11) TMI 760 - AT - Central Excise

Valuation - includibility - inclusion of cost of advertisement to the extent of 50% paid by the dealer to the respondent - Circular No. 643/34/2002-C.X. dated 1-7-2002 - Held that - In the case of Philips India Ltd. v. CCE 1997 (2) TMI 120 - SUPREME COURT OF INDIA , learned Appellate Authority came to the conclusion that 50% cost of the advertisement received by the Respondent was not includible in the assessable value - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against the order of the Commissioner (Appeals) regarding the inclusion of advertisement cost in the assessable value.
- Interpretation of Circular No. 643/34/2002-C.X. regarding the inclusion of advertisement cost in assessable value.
- Analysis of the decision in the case of Philips India Ltd. v. CCE.
- Confirmation of the Commissioner's order and dismissal of Revenue's appeal.

Issue 1:
The appeal was filed against the Commissioner (Appeals) order that the cost of advertisement to the extent of 50% paid by the dealer to the respondent should not be added to the assessable value, while the Adjudicating Authority held otherwise. The Adjudicating Authority found that Revenue did not establish a clear case of advertisement by the respondent after Valuation Rules came into force. It was noted that unless it could be shown that prices were not the sole consideration for sale, the amount collected by the respondent could not be added to the sale price. The Adjudicating Authority also observed that the sale was on a principal-to-principal basis and that there was no contention of the respondent suppressing any additional amount collected for advertisement to evade duty.

Issue 2:
The Departmental Representative (DR) argued that the advertisement cost collected by the respondent should be part of the assessable value based on Circular No. 643/34/2002-C.X. dated 1-7-2002. However, the Tribunal, after examining the records and the order of the Adjudicating Authority, found that the Commissioner (Appeals) did not commit any error of law. The Tribunal noted that the Adjudicating Authority's decision was in line with the case law and previous Tribunal orders on similar issues, including the decision in the case of Philips India Ltd. v. CCE.

Issue 3:
The Adjudicating Authority, in line with the decision in the case of Philips India Ltd. v. CCE, concluded that 50% of the advertisement cost received by the respondent was not includible in the assessable value. The Tribunal concurred with this analysis, stating that the Commissioner's order did not suffer from legal infirmity. Therefore, the Tribunal confirmed the Commissioner's order and dismissed the Revenue's appeal. The cross objection was also disposed of in light of this decision.

This judgment highlights the importance of establishing a clear case for including advertisement costs in the assessable value, considering the nature of the sale and whether the prices were the sole consideration for the sale. The decision also emphasizes the significance of legal precedent and the interpretation of relevant circulars in determining the assessable value in such cases.