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TMI Blog2016 (3) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... have an obligation of expenditure towards publicity and advertisement to increase the quantum of sale. We are not in agreement with such propositions. If the same accepted, it will lead to a position that only that much of advertisement and publicity required to surpass the minimum volume of purchase is required to be added in their transaction value. The legal position cannot be established by such presumptions. Further, it is a clearly admitted fact that any publicity and advertisement by the dealer will certainly benefit them by higher sales and higher profit. To say such publicity is only to be treated as a beneficial act for the appellant is not tenable. There is no obligatory, legally bound expenditure by the dealer for such public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of goods sold through the 2 above mentioned dealers. The main appellant undertake advertisement and publicity through various media to promote the sale of their finished goods. The wholesale dealers, namely, SAR and Radiant also undertake advertisement and publicity activities on their own to promote their sales. Certain investigations were conducted by the officers of the Department. Based on the investigation, a SCN dated 28.04.2005 was issued to the main appellant demanding duty of ₹ 84,79,579/- for the period April 2000 to March 2004. The demand is with reference to the expenditure incurred by their wholesale dealers (SAR and Radiant) after reducing the amount of expenditure reimbursed by the main appellants. The case wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finished goods manufactured by the appellants, 100% expenditure are borne by the appellants. Where the advertisement activity benefits both the appellants as well as the dealers, the expenses are shared in the ratio of 60:40 between the appellants and the dealers. d) The wholesale dealers were entitled to market the goods in such manner as they think fit. The expenditure towards advertisement and publicity incurred by these wholesale dealers are not on behalf of the appellants. Addition of such expenditure in the assessable value of finished goods manufactured by the appellant is not legally sustainable. The definition of Transaction Value as per Section 4(3)(d) is exhaustive. Any amount, over and above, the sale price charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the wholesale dealers in the assessable value of the goods sold by the appellant to such wholesale dealers. The case of Revenue is that only two wholesale dealers are dealing with the entire product of the appellants, and hence, they have commercial interest with the appellants. Consequently the expenditure incurred by these dealers are to be included in the assessable value. The Original Authority emphasized that the agreement incorporated the condition of buying specified minimum quantities failing which there may be increase in the price based on the volume. A link is sought to be made between such condition and the dealers expenditure on advertising and publicity of the goods. We find that it is an admitted fact that wherever the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue from the assessable value , the essence of valuation principles had not undergone major change and the decisions delivered by this Court with regard to unamended provision on the principle of valuation were still applicable in determining the transaction value under the new provisions of Section 4 of the Act read with Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. In fact, the Order-in-Original in M/s. TVS Motors Company Ltd. or in other cases itself proceeds on that basis. 8. In Honda Seils Power Products Ltd. vs CCE, Meerut-III [2015 (317) ELT 510 (Tri. Del)], the Tribunal examined the issue of inclusion of advertisement expenditures borne by the dealers in the assessable value. The Tribunal c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alembic Glass Industries Ltd. [2006 (201) ELT 161 (SC)] the Hon ble Supreme Court again affirmed their decision in Besta Cosmetics (supra). It was held that when there is no enforceable legal right and the transaction is between principal to principal, no addition towards sale value can be made on account of advertisement expenditure incurred by the dealers. 12. We have perused the relevant portion of the agreement in the present case. Much emphasise is laid by the Revenue on the clause that in the event that the wholesale dealer is not able to lift the specified quantities mentioned in the agreement, the appellant may increase the price based on the volume of purchase by the dealers. It was sought to be argued that such condition will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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