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TMI Blog1997 (2) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellants during the years 1985-86 to 1987-88 had cleared the goods to the tune of Rs. 1 Lakh for the year 1985-86 had made extra realisation over and above the amounts on which duty was paid. These amounts which are over and above, the amounts on which duty was paid are as under :- 1985-86 : Rs. 1.00 Lakh 1986-87 : Rs. 1.50 Lakhs 1987-88 : Rs. 6.00 Lakhs These amounts were arrived at based on the statement of the appellant before the income tax authorities. This position is not contested before us by the appellant. It was also admitted before the adjudicating authority. The duty demanded attributed to these amounts is therefore confirmed in terms of the impugned order. 3. The context contention made before us is with respect to the duty demand on the royalty amount collected by the appellant from the dealers in terms of the agreement entered into between the appellant as well as the dealers. In respect of the above said royalty amount, the lower authority has relied on the statement of some of the dealers. Out of these dealers the appellant was given the option to cross-examine only 3 dealers and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andloom cover. He, therefore pointed out that this statement of Shri Mathew as well as the other two dealers whom he has cross-examined goes to show that they were putting the handloom covers on the mattresses purchased by them and they were putting the labels of Joy Foam . He, therefore stated that the statement of Shri Mathew clearly shows that the royalty agreement was acted upon and the royalty was paid for the use of the brand name. 6. The learned JDR, Shri S. Arulswamy on the other hand pointed out that the dealers have stated in their initial statement and they were selling the goods in the same condition in which they received it from the appellant. He, therefore pointed out that the initial statements of the dealers reveals that they were not doing any fabrication work. Therefore, he stated that the fabricated goods alone came to their premises from the appellant. He, therefore pointed out that they were not doing any fabrication work in terms of the agreement and the royalty clause was intended only to cover the extra realisation of the appellant. He also stated that the statement of Shri Mathew is reliable. In this connection, he drew our attention to para 28 of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting handloom to cover over that sheet. The Duty is paid only on the plain sheet and not on the value of the handloom cover. He also stated that they were displaying the brand name on the product received from M/s. Joy Foam by way of stickers or labels and then they will cover it with Polyurethane covers which also bear the brand name of M/s. Joy Foam. This figures at para 353 of the Paper Book. 8. In the cross-examination of Shri Abdul Jawad of CHS Agencies, it is stated to be the major dealer by the learned JDR. He has stated as follows :- We were using the brand name of M/s. Joy Foam Company. We are franchise holder. We were using the logo of Joy Foam in the bills -. Royalty was paid by separate cheque. Royalty is paid only for supply of goods. It is accounted in the book. 9. It is therefore seen that in the statement of Shri K.M. Mathew, he has clearly stated that he is paying the royalty as per the agreement. This is further confirmed by his answer to the effect that he is displaying brand name on the product received from the appellant by way of putting the stickers or labels and then covering it with Polyurethane covers which also bear the brand name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of doubt has to be given to the appellant. There is no plea by the revenue nor is their any finding that by reason of collection of this royalty, the same is not abatable from the total realisation. In this view of the matter, we hold that the benefit of doubt has to be given to the appellant and the finding in the impugned order regarding the royalty amount is not sustainable. Even otherwise we find that in 1982, the appellants had furnished the agreement about the royalty collection to the department on a query from them. Therefore, the authorities were aware about the collection of royalty charges by the appellant. Even at that relevant time, the department did not choose to include the above said amount of royalty to the assessable value. In such circumstances, it is clear that the authorities themselves was satisfied in principle that the same was not includable. In such circumstances, the appellant s plea that the demand is barred by limitation acquires credibility. 10. The next question to be considered is with respect to the duty to be charged in respect of the extra realisation. The plea of the learned advocate is that the extra realisation made as has been shown ..... X X X X Extracts X X X X X X X X Extracts X X X X
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