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TMI Blog1994 (3) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... harges was also being raised. This second debit note was raised towards advertisement and publicity charges, up to 31-3-1979, and thereafter these debit notes were named as for management service charges. 3. It was alleged vide Show Cause Notice dated 29-3-1983 that the assessee had been collecting the transportation charges in excess of the actual transportation costs, and that they had also been collecting the advertising/ publicity and management service charges from their dealers and had wilfully suppressed the material facts from the department in order to get the assessable values approved at a lower level, collecting a part of the value by way of two debit notes, and thereby evading the Central Excise Duty. On adjudication the Collector of Central Excise, Madurai held that the assessee had declared deliberately a fictitious price of a lower level, not relevant to the marketing pattern adopted by them for their goods, and got the same approved by wilfully suppressing the material facts from the knowledge of the department. Regarding advertising/management service charges, he held that the entire amount of advertising charges and management service charges were not eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he factory gate were almost negligible, the disproportionately high transport charges were collected even in respect of such few retail sales. In one earlier Price List they have indicated the transport charges, but no such charges were shown in the Price Lists filed for the subsequent period. As regards the advertisement and management service charges were concerned, they were never disclosed to the Department. The list of the records was filed after filing of the price lists, and even after the assessments. In any case the filing of the list of their private records could not amount to the declaration of correct prices under the law, and the appellant could not escape from the consequences of non-declaration of the charges which formed part of the assessable value. The learned SDR stated that the Assessee was not to claim deductions himself. Here even debit notes were not filed with the Price Lists and were not known to the Department. Regarding advertising charges the learned SDR submitted that they were in the nature of expenses incurred by the field staff of the assessee s company, and in place of bearing them themselves, the assessee has recovered these charges from the deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in their subsequent Price Lists. The appellants have pleaded that the Excise Authorities had asked them that no approval for such charges was necessary from the department. In addition to the transport charges, separate debit notes were also being raised for advertisement and publicity charges/management service charges. No declaration with regard to such charges was filed by the assessee to the department at any stage. Under the Self-Removal Procedure, the assessees were required to file the list of various records maintained by them. The assessee in the case before us had pleaded that in their list of records, there was a mention of the debit notes for advertisement charges and as such they had discharged their obligation, and according to them no separate declaration in the Price Lists or otherwise was necessary. 10. The Self-Removal Procedure places a great deal of trust on the assessee. While under the Physical Control System, each and every clearance was required to be physically supervised by the Central Excise Officers, under the Self -Removal Procedure, on the basis of the already approved classification list and approved price list, the assessee on their own, could as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansport charges as referred to by the assessee in their Price List approved on 15-7-1977. He has remarked : So long as the wholesale normal prices exist at the factory gate, the question of approval of freight charges to different destinations does not arise. In case the factory charges equalised freight then only the freight charges have to be included. The freight charges are also necessarily to be approved in case the wholesale normal price is not known and the price approval is required under Section 4(2). The price approval on 15-7-1977 for M/s. Madurai Soft Drinks (P) Ltd., Madurai is not covered by the above cases. Hence, it is not necessary to approve the transport charges referred to in your reference cited above. The assessee may be informed accordingly. 14. In the subsequent Price Lists, the assessee did not indicate the transportation charges. Without going into the merit or quantum of these charges separately collected, we do not consider that the Department was justified in invoking the extended period of limitation in so far as the transportation charges are concerned. The letter from the Superintendent, Central Excise, although contains a number of conditionalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not furnished the details of the publicity material, their procurement and expenditure incurred with regard to these marketing activities. In this connection, the statements of their dealers are revealing. They have deposed that they had never requested the manufacturer to do any advertising on their behalf. They had stated that they were not aware of the reasons for getting the debit notes in addition to the invoices. While some dealers had admitted to have signed some papers; none of them admitted to have received any copy of the same. The dealers have submitted that so far as the total cost was within their purchase price, they were not concerned as in what way it was collected from them. 17. As held by the Tribunal in the case of Eddy Current Controls (India) Limited v. Collector of Central Excise, 1989 (39) E.L.T. 147 (Tribunal), expenditure on advertisement on behalf of the appellant was in the nature of additional consideration, and the money value of the additional consideration was liable to be added to the assessable value of the goods (Para 3 refers). In the case - Collector of Central Excise, Bangalore v. R. Gac Electrodes (P) Ltd., Bangalore - 1988 (33) E.L.T. 485 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at by them on their own. The Tribunal in the case of Kerala State Detergents and Chemicals Limited v. C.C.E. Cochin, 1987 (27) E.L.T. 323 (Tribunal), in para 3(a) have observed as under :- * * * * * 21. Reference may also be made to the Tribunal s decision in the case of C.C.E. v. Metal Box India Ltd. - 1989 (39) E.L.T. 79 (Tribunal). Para 22 of that order is extracted below : * * * * * 22. There was no declaration at all about these charges; so there was no occasion for calling of their details or of their justification in not including them in the declared prices. As the department was not aware of the practice adopted by the appellants for collecting the advertisement charges, the extended period of limitation was correctly invokable, on the rationale of the Tribunal s decision in the case of Jai Drinks Pvt. Ltd. v. C.C.E. - 1991 (36) E.C.R. 14, itself relied upon the appellants. The plea that the list of their records included debit note for collection of advertisement and publicity charges and debit notes for collection of delivery charges and management service charges and as such there is no suppression, has no force in as much as under the Self-Removal Proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Pvt. Ltd. v. C.C.E. - 1989 (40) E.L.T. 214 (SC). In that case, the Hon ble Supreme Court had also observed in para 10 that the fact that the department visited the factory of the appellant and they should have been aware of the production of the goods in question, were no reason for the appellant not to truly and properly describe these goods . If such is the case with the production, it is much more necessary as regards valuation, that too when separate debit notes were being raised without the knowledge of the department. 26. The facts in the case of General Industrial Controls (Pvt.) Ltd. v. C.C.E. - 1991 (52) E.L.T. 449 related to goods falling under Item No. 68 of the old Central Excise Tariff, and the assessments were being made on the basis of the invoice value, under exemption Notification No. 120/75-C.E., dated 30-4-1975. The matter related to the expenses incurred by the buyer for advertisement on his own account, and not on behalf of the manufacturer. In the case before us the assessees were raising separate debit notes and collecting additional consideration to themselves from the buyers. 27. Taking all the relevant considerations into account, we confirm that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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