2018 (4) TMI 1023 - AT - Central Excise

Valuation - includibility - whether 50% advertisement expenses borne by dealer with reference to sale of the finished goods by the appellant should be included in the assessable value or otherwise? - Held that - the 50% advertisement expenses are borne by the dealer. Since this amount is not flowing to the manufacturer it cannot be said that there is an extra consideration - there is no question of inclusion of any amount which is not flowing to the appellant. Hon ble Supreme Court in the case of TVS Motors 2015 (12) TMI 874 - SUPREME COURT held that 50% advertisement expenses borne by the dealer is not includible in the assessable value of the finished goods. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether 50% advertisement expenses borne by the dealer should be included in the assessable value of the finished goods by the appellant.

Analysis:
The issue at hand pertains to the inclusion of 50% advertisement expenses borne by the dealer in the assessable value of the goods supplied by the manufacturer. The appellant's counsel referenced several judgments to support their position, including Commissioner of Central Excise, Mysore Vs. TVS Motors Co. Ltd., Hero Honda Motors Ltd. Vs. Commissioner of Central Excise, Delhi-III, and Hercules Hoists Ltd. Vs. Commissioner of Central Excise, Mumbai-III. The Revenue, represented by the Superintendents and Assistant Commissioner, maintained the stance taken in the impugned orders.

Upon thorough consideration of the arguments presented by both parties and a review of the records, the Tribunal concluded that the 50% advertisement expenses borne by the dealer should not be included in the assessable value of the finished goods. The Tribunal emphasized that since this amount does not flow to the manufacturer, it does not constitute extra consideration. Citing the precedent set by the Hon'ble Supreme Court in the case of TVS Motors, the Tribunal established that the issue has been settled, and the 50% advertisement expenses borne by the dealer are not to be included in the assessable value.

In light of the above analysis, the Tribunal set aside the impugned orders and allowed the appeals in favor of the appellant. The judgment, delivered on 27/03/2018, solidifies the legal position regarding the treatment of advertisement expenses in the assessable value of goods supplied by manufacturers.