9911796707
TMI Blog2008 (12) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of the same and the deduction of various post-manufacturing expenses. It is seen that the orders passed earlier were the subject matter of the dispute before Hon ble High Court of Gujarat as also before the Tribunal. It is seen that the Tribunal vide an order dt. 13-5-2003, held as under in respect of various deductions being claimed by the assessee. (i) Handling charges were liable to be added to the assessable value and the duty correctly demanded by the adjudicating authority and that the payment was also not barred by limitation since the proviso to Section 11A(i) of the said Act was rightly invoked. (ii) The dedction on account of built-in-trade discount was permissible and hence the demand on account of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s incurred by the assessee for delivery of the goods from the factory gate to the premises of wholesale dealer/distributor have been allowed deduction to arrive at the correct assessable value. The deduction being claimed on account of VOC is in respect of the cost of the transportation incurred by the wholesale dealer/distributor for transportation of the goods from the depot to the interior part of the country/remote areas where the goods are marketed and sold by the wholesale dealer/distributor. 50% of such transportation charges from the depot to the seller's premises were being reimbursed by the company to their dealer/distributor. The said reimbursement has been held to be as sales promotion expenses by the lower authority, whereas th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributors. The total transportation expenses in this account have been claimed by us as deduction towards freight-outwards from the price declared to the Central Excise Departments (Emphasis provided) Shri U. Raghavan, DGM (Marketing) of M/s. LNL had corroborated the statement of Shri Ono, vide his statement dt. 4-11-88, regarding Van expenses. Circular No. LNL/MA/25/10/81 dt. 20-10-81 issued by M/s. LNL, Baroda under the signature of Shri M. Ashara, Dy. Managing Director (F.No. 10 of LNL Baroda), inter alia, mentions as under: This recent increase we can off-set by reducing trade promotion, advertising and publicity or van operation. But due to various reasons, this will not be admissible. Further, Shri H. Ono in his statement dt. 27- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere considered as S.P. Expenses of LNL. Further evidence of VOC being credited to LNO S.P. Fund is found in the ex-distributor price structures , effective from 8-5-84 and 15-5-84 (vide Page No. 64, 66 and 52 of F.No. SD/5 and Page No. 7 and 9 of F. No. SD/6). Minutes of the meeting between LNL and LPL, West Division dt. 24-12-83 (vide Page 1 to 5) in F.No.9 LPL) contains subject viz. Van Operation at S. No. 6. It appears from the said minutes that LPL officials had brought to the notice of LNL officials that the van operation cost was going very high in remote areas of Sangli, Ratnagiri, Thane and Raigad Districts. Mr. Ono had suggested that LPL should acquire three vans for using them for sales publicity purpose wherein LNL subsidize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no dispute about the same. Subsequent sale by wholesale dealer to the customer is an activity, which is not required to be taken into consideration for arriving at the assessable value. As such, 50% expenses actually incurred by the wholesale dealer, cannot be added in the assessable value and on the same analogy 50% expenses incurred by the company by way of reimbursement to the wholesale dealer, cannot be allowed deduction. The same would have been an admissible deduction had the appellant adopted the final sale price at the buyers premises and then worked back way for arriving at correct assessable value. Taking an example, that the price of the goods per unit sold at depot to wholesale buyers is Rs. 100/- and expenses under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would determine the question of penalty having regard to the duty payable by the Company, the same does not mean that the penalty has to be imposed, if otherwise found not admissible. It only means that the issue of penalty is left open. We, accordingly, deal with the appellant s contention that the issue being a bona fide issue of admissibility of VOC as deduction from the assessable value as also the handling charges having been disclosed in the Circular as well as in the invoices which were being filed in the monthly returns, the appellant s bona fide cannot be doubted. Similar VOC was held as a permissible deduction from the assessable value as cost of transportation by the original adjudicating authority, whose orders were appealed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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