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TMI Blog2018 (1) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... expanses on the expression obligation of RIL England and as a clear condition of the sale of goods for disputing them in India. It cannot be concluded, in the facts of the present case, that the expenditure has been incurred by the appellant on their own account. Time limitation - Held that: - In the declaration made by the appellant before SVB the Distribution Agreement with the clause relating to the expenditure on advertising has not been produced. The lower Authorities have held that this amounts to suppression of facts - extended period rightly invoked. Appeal dismissed - decided against the assessee. - Appeal No.C/51559/2017-[DB] - Final Order No.50117/2018 - Dated:- 12-1-2018 - Dr. Satish Chandra, President And Mr. V. Padman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndatory penalty. Aggrieved by the impugned order the present appeal has been filed. 3. With the above background we head Shri Anil Sood, Ld Advocate for the appellant as well as Shri R.K. Majhi, Ld. DR for the Revenue. 4. Shri Sood, Ld. Advocate for the appellant summarized the grounds of appeal as follows:- The allegations of undervaluation have been made by the Department on the basis of para 4.134 of the Distribution Agreement dated 01/03/1995 entered into by the appellant with RIL, England. In terms of the above para, the appellant was required to incur the expenditure on advertisement and promotion of not less than 6 per cent of the total invoice value. The Department took the view that such expenditure is being incurred as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd there are no grounds for demanding penalty and charging interest section 28AA. 5. The Ld. DR justified the impugned order. He submitted that in terms of the Distribution Agreement, the appellant has incurred the advertising and promotion expenses, not on their own account, but as a condition for sale of goods by their principal RIL England. Since such amount has been incurred on behalf of the exporter and in addition to the price of the goods invoiced, such expenses will be includible in the transaction value in terms of Rule 10 (1) (e) of the Customs Valuation Rules, 2007. 6. We have heard both sides and perused the records. 7. It is not in dispute that the appellant and Reebok International Ltd, England (RIL) are related, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotion. It is an obligation of the appellant to its principal for import of goods. The other related question is whether such amounts have been spent by the appellant to satisfy an obligation of the seller i.e. RIL England. 8. In addition to para 4.13.4, further conditions are mentioned in clause 4.9. In terms of this clause, we note that the appellant is not only required to spent on advertising, but is required to submit marketing and business plan, advertising budget, and even is required to get vetted by Principal draft of any endorsement or promotion contract exceeding the value of US dollar 25 per cent year. These stipulations lead us to conclude that RIL UK is controlling every aspect of such promotion. RIL UK is the owner of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as set aside the demand made by the Department by including certain expenses incurred by the M/s Samsonite towards advertising. However, after a careful perusal of the case we note that such expenses were charged to the account of M/s Samsonite by their principal as a share of the global expenditure. Consequently we are of the view that facts of that case is distinguishable and will not be applicable to the present facts of the case. 11. The ground of time bar raised by the appellant is also not justified in the facts and circumstances of the present case. In the declaration made by the appellant before SVB the Distribution Agreement with the clause relating to the expenditure on advertising has not been produced. The lower Authorities h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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