9911796707
TMI Blog2003 (5) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ad filed a writ petition to the Gujarat High Court, seeking issue of directions to the department to accept the deduction that it had claimed. By its orders passed on 30-9-1987, the High Court directed the assessee to file revised price list for the period under consideration directing the Assistant Collector to decide on the admissibility on the deductions claimed therein. Accordingly the assessee filed price list on 18-3-1988. The Assistant Commissioner passed order on 25-12-1988 allowing some deductions and disallowing some others. An appeal was filed to the Commissioner (Appeals) against that part of his order holding that freight outward was entitled to deduction. The appeal alleged that the part of the expenses described as "freight o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Madras Rubber Factory - 1995 (77) E.L.T. 433. The "price structure" of the appellant which indicated the price at which the goods have been sold by the appellant to its distributors and the prices at which the goods should be sold indicated clearly that service charges at a specified rate has to be recovered. This price structure formed part of the price list that was submitted to the department and should have allotted to the departmental authority. The approval of the price list is not a routine activity on one requiring application of mind and had this been done, the officers of the department would have become clearly aware of the nature of the handling charges. The invoices, which disclosed collection of handling charges over and abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention that was earlier taken by the appellant was that these charges constituted loading and unloading and handling charges for the goods. If that were to be so, it would have been easy enough for the appellant to correlate the charges of such expenses, and to show that by means of bills and other documents for transportation it claimed deduction. It has to be noted that for includability of this cost on merits is not disputed. It is therefore not possible to agree that these charges are anything other than consideration for the sale of the goods. 5.The next contention is that the fact of these charges was disclosed in some of the price structure that was enclosed to the price list. In a few cases, the price structure does contain a sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s form part of the freight outward for which deduction had been claimed. In May, 1984 by a resolution of the Board of Directors, the amount credited as transport charges from 1st April, 1983 to 31st December, 1983 was transferred to the head "Sale Promotion Expenses". This amount did not form part of any deduction that was claimed, and hence duty has been paid. 7.The next question relates to the admissibility of "built-in trade scheme". It is common ground that this represents discount made available to the distributor of 4% over and above 6.25% that was accorded. There is some dispute as to whether or not the appellant had given directions to its distributors as to the method of spending this amount. The department obtained this knowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the margin of distributor. Even so, however, we fail to see why this discount should be disallowed solely because it was to be utilised for advertising the appellant's products. The departmental representative emphasises that the ratio of the Supreme Court's judgment in Philips India Ltd. v. CCE - 1997 (91) E.L.T. 540 will not apply to the facts before us because, unlike in the present case there was no control by the manufacturer over the manner on which the advertisement (for which the discount was earmarked) was to be incurred. In the Philips India Ltd., case, there was no direction given to any dealer as to how the amount was to be spent. 9.We fail to see how this makes difference to the issue. In Philips India Ltd., the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing the advertisement was carried out in consultation with the appellant's representative. We, therefore, hold that there was no basis for disallowing this discount. 10.The third issue relates to van operation charges. In terms of the arrangement of the appellant, it made reimbursement to its distributors half of the expenses incurred by them for transport. The Collector has disallowed this deduction on two grounds, that these expenses are in fact intended for promoting sales of goods manufactured by the appellant and thus in the nature of sales promotion expenses and also on the ground that the provisions of Section 4(2) of the Act will not apply. He says that if deductions are to be allowed, chaotic illogical situation will arise w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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