2016 (3) TMI 1046 - SC - Central Excise

Transaction value - whether the advertisement expenditure incurred by the dealers of the respondent-company does not form part of the transaction value for purposes of levy of excise duty? - Held that - The Commissioner has taken the view that the expenditure so incurred on any advertisement campaign was liable to be included as part of the transaction value under the Act for purposes of levy of excise duty. A reading of the order passed by the Tribunal, however, leaves much to be desired in as much as several issues and aspects that arose for consideration and that had been dealt with by the Commissioner in his order have not been even mentioned leave alone satisfactorily dealt with. The order is on that short ground alone liable to be set-aside. In fairness to Mr. V.Lakshmikumaran, learned counsel for the respondent, we must mention that even he was agreeable to the matter being remitted back to the Tribunal for a more articulate and satisfactory adjudication of the aspects that arise for consideration. In the result, we allow this appeal, set-aside the order passed by the Tribunal and remit the matter back to the Tribunal for a fresh disposal in accordance with law.

Summary

Issues Involved:
Appeal against judgment of Customs, Excise and Service Tax Appellate Tribunal regarding inclusion of advertisement expenditure in transaction value for excise levy.

Detailed Analysis:

1. Background of the Case:
The appeal was filed against a judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai. The Tribunal reversed the order of the Commissioner of Central Excise, holding that the advertisement expenditure incurred by the dealers of the respondent-company should not be considered as part of the transaction value for excise levy under the Central Excise Act, 1944.

2. Arguments Presented:
Both parties presented their arguments before the Supreme Court. The Commissioner of Central Excise had held that the dealers appointed by the respondent-company were obligated to comply with the company's directions, including conducting advertisement campaigns for promoting the company's products. The Commissioner concluded that such advertisement expenses should be included in the transaction value for excise duty.

3. Deficiencies in Tribunal's Order:
The Supreme Court noted that the Tribunal's order lacked a satisfactory discussion of the issues and aspects considered by the Commissioner in his order. The Court found that the Tribunal failed to adequately address the points raised in the Commissioner's order, rendering the Tribunal's decision inadequate and incomplete.

4. Decision and Remittance:
The Supreme Court allowed the appeal, setting aside the Tribunal's order. The matter was remitted back to the Tribunal for a fresh disposal in accordance with the law. The Court did not impose any costs in this regard. It was acknowledged that even the respondent's counsel agreed to the remittance for a more thorough adjudication of the relevant aspects.

In conclusion, the Supreme Court's judgment focused on the inadequacies in the Tribunal's decision-making process and ordered a fresh disposal of the case for a more comprehensive examination of the legal issues involved.