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TMI Blog2009 (10) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the products sold by the appellant company. The Commissioner did not uphold the allegations that the marketing company is a dummy concern and that they are related to the appellant company. However, he held that the expenses towards sales promotion, advertisement and marketing and ex-gratia service charges incurred by the marketing company have to be included in the assessable value and accordingly confirmed demand of Rs. 11,63,501/- as against the proposed demand of Rs. 22,63,142/- and imposed penalty of Rs. 11,63,501/-. Held that- there is no evidence to show that the expenses incurred by the marketing company which is sought to be included in the assessable value of the goods cleared by the manufacturer is in pursuance of contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng company have to be included in the assessable value and accordingly confirmed demand of Rs. 11,63,501/- as against the proposed demand of Rs. 22,63,142/- and imposed penalty of Rs. 11,63,501/-. 4. Ld. Consultant submits that the confirmation of the demand is on grounds which are beyond the allegations/charges in the Show Cause Notice. He also submits that the Commissioner has clearly held that the marketing company is not a dummy concern and that they are not related to the appellant. Having held so, there is no evidence brought out that the expenses incurred by the marketing company are at the instance of the appellants and that it was in pursuance of contractual obligation. Under these circumstances, addition of the expenses incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appellant and their dealers are genuine agreements entered into at arm's length, that they are as between principal and dealer and that the payments contemplated therein are made. The relevant clauses of the agreement are: (6) All Company's products to be supplied under this Agreement shall be paid for in cash upon delivery. All taxes (Central or State), levies imposition, octroi and duties which may be assessed on the company in respect of the sale of the Company's products or levied on the said sales shall be borne by the Dealer and the Dealer shall indemnify and keep indemnified the Company against any claim, demands, proceedings, costs, charges and expenses in respect of such imposition, taxes and duties. (16) The Dealer will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les of the Company's products. (34) Nothing in this Agreement shall constitute or be deemed to constitute the Dealer as agent of the Company for any purpose whatsoever and the relationship between the parties herein is that of vendor and purchaser. It seems to us clear that the advertisement which the dealer was required to make at its own cost benefited in equal degree the appellant and the dealer and that for this reason the cost of such advertisement was borne half and half by the appellant and the dealer. Making a deduction out of the trade discount on this account was, therefore, uncalled for. As to the after sales service that the dealer was required under the agreement to provide, it did of course enhance in the eyes of intendi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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