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TMI Blog2011 (7) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... ty activities was also being undertaken by their dealers. In this regard, Clause 28 and 29 of the Articles-VII (Promotion and Advertisement) of the appellant's agreement with their dealers are as under :- "Clause 28 :- The Dealer shall at all times during the currency of this Agreement use their best endeavours to promote sale of the product within the Territory and to secure and maintain the confidence of customers in the products. Clause 29 :- The dealer shall advertise and/or promote products, parts and service facilities in such a manner as to secure adequate and effective publicity to the satisfaction of the company at its own expense. Clause 29.1 :- The dealer shall not engage in any form of sales promotion or publicity or release ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch had not been paid. It is on this basis that a show cause notice was issued to the appellant for demand of duty amounting to Rs. 1,78,59,216/- along with interest from them and also for imposition of penalty on them under Section 11AC. The show cause notice was adjudicated by the Commissioner vide Order-in-Original Nos. 10-11/SSS/CE/09, dated 28-10-2009 by which- (a) duty demand of Rs. 1,78,59,216/- was confirmed against the appellant along with interest under Section 11AB and; (b) penalty of equal amount was imposed on the appellant under Section 11AC of the Central Excise Act, 1944. 1.4 Against the above order of the Commissioner, the present appeal along with stay application has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tay application by reiterating the findings of the Commissioner in the impugned order and emphasised that as discussed in detail in the impugned order, there are specific clauses in the appellant's agreement with their dealers, which require them to advertise and promote the products of the appellants, that in view of such clauses in the agreement, no dealer would defy such an obligation, as in terms of the appellant's agreement with their dealers, the dealership agreement can be terminated on account of their unsatisfactory performance, that these clauses in the appellant's agreement with their dealers have to be treated an enforceable rights and hence, the expenses incurred by the dealers for advertisements and promotion of the appellant' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licity of the Appellant's products. We are, therefore, of the prima facie view that so far as demand of duty of Rs. 13,39,756/- on the value is concerned, the same is on the strong footing. 7. As regards the duty demand of Rs. 1,65,19,459/-, the same is on the basis that the dealers, during the period of dispute, have incurred an expenditure of Rs. 9,14,65,053/- on the advertisement and promotion of the appellant's products. We find that there are specific clauses in the appellant's agreement with their dealers which require the dealers to promote the sales of the appellant's products within their territory at their own expenses and such sale promotion and publicity activities are to be carried on with the approval of the appellant. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 4, as it stood during the period prior to 1-7-2000 while w.e.f. 1-7-2000, new section based on the concept of 'transaction value' as defined on it had come into force and hence the same does not appear to be applicable to this case. 8. In view of the above discussion, we are of the view that the appellants have not been able to establish prima facie case in their favour and, hence, this is not the case for total waiver. The appellants are, therefore, directed to deposit the entire amount of duty demand confirmed against them within a period of 8 weeks from the date of this order. The compliance to be reported on 10-10-2011. 9. Hence, the requirement of pre-deposit of duty demand, interest and penalty is waived and recover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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