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TMI Blog2007 (7) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods in whatever manner they deem fit but they are forbidden from affixing assessee s trademark on the same. That restriction is quite justified to protect the legitimate business interests of the assessee. The trademark can only be affixed in the case where the goods are purchased by the assessee, and rightly so, because the trademark belongs to the assessee and is to be used for his business purposes. Ld DR s argument that only off the shelf goods can be considered to be purchases and made to order goods is to be considered as works contract, is devoid of any merits sustainable in law. In view of these discussions, and respectfully following the co-ordinate Benches in the case of ITO vs. Willmar Schwabe India (P) Ltd. [ 2005 (3) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing to various outside concerns, which are referred as OEMs. The goods purchased from these OEMs were made to the specifications of the assessee and are subject to strict quality control of the assessee. It is only when the assessee is fully satisfied about the product that the assessee's brand name is fixed on those products. A survey was conducted on the premises of the assessee company and it was found that the assessee is not deducting tax at source from payments made to these OEMs towards purchase of products manufactured for the assessee. The assessee's contention was that it was a purchase on principal to principal basis, and that it was not in the nature of a works contract which could be covered by the scope of s. 194C. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout any success. The CIT(A) was also of the view that entire outsourcing is controlled by the assessee, and in essence it is a works contract. The assessee is not satisfied and is in appeal before us." 3. Shri Vohra, learned counsel for the assessee, contends that the issue in appeal is squarely covered by the decision of a co-ordinate Bench in the case of ITO vs. Willmar Schwabe India (P) Ltd. (2005) 95 TTJ (Del) 53, which has been since confirmed by the Hon'ble Delhi High Court, by dismissing Revenue's appeal against the said order. It is submitted that as long as the sales is on principal to principal basis, the sale will be outside the purview of the s. 194C. It is pointed out that merely because the goods are as per the specificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir taxable receipts, the same amount cannot be collected again. It is contended that once the vendor discharges his tax liability, the vicarious tax withholding liability cannot survive. As for the liability under s. 201(1A), learned counsel submits that the interest liability can only be till the period till the time tax dues of the OEM are paid. When the due tax is received by the Government, the interest charge cannot continue any further. On the strength of these arguments, learned counsel urges us to reverse the action of the authorities below and quash the impugned orders saddling the assessee with liability for non-deduction of tax at source. Smt. Iyer, on the other hand, laboriously takes us through the orders of the authorities bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dships' observations on Anandam Vishwanathan's case in which printing of examination papers for the universities was considered to be a works contract. It does not mean that wherever there are special skills required in manufacturing an item, it will go out of ambit of sales. As for non-production of agreements pointed out that two agreements which were available were duly produced and the CIT(A) has duly noted the assessee's stand that in the remaining cases, the supplies were made against the purchases orders. The objections of the Revenue are thus devoid of any substance or merits. We are again urged to vacate the TDS demands sustained by the CIT(A). 4. Having given our careful consideration to the rival contentions and the material on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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