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2024 (3) TMI 1135 - AT - Central ExciseValuation - inclusion of advertisement and publicity expenses incurred by the dealers as per the terms and conditions of the dealership agreement mutually agreed between the appellant and their dealers, in the assessable value of the vehicles sold by the appellant - Extended period of Limitation. The case of the Department is that the price at which the appellant sold the vehicles to the dealers is not the sole consideration and that is the reason that the learned Commissioner in the impugned order confirmed the demand of duty by treating the expenses borne by the dealers on advertisement and publicity as additional consideration liable to be included in the assessable value, on which duty was not paid by taking resort to the provisions of Section 4(1)(b) of the Act read with Rule 6 of the Central Excise Valuation Rules, 2000. HELD THAT:- The perusal of various clauses of the dealership agreement shows that the expenses incurred by the dealers, have been incurred by them on their own accord, and not for or on behalf of the appellant because the dealership agreement does not provide for any such expenses to be incurred by the dealers on behalf of the appellant. The price of the vehicles remains the same and is not dependent upon whether the dealers are incurring expenses on advertisement or not. No doubt that the main reason for undertaking advertisement by the dealers is to promote their own business and incidentally the appellant is also benefitted by increase sale of the vehicles, but it cannot be the only ground for inclusion of advertisement expenses incurred by the dealers to the assessable value for the purpose of determining the duty payable from the sale of the excisable goods - perusal of various terms and conditions shows that such expenses are purely optional at the end of the dealers and they have to decide whether to incur such expenses or not, because it is found that there are certain dealers who do not opt for incurring such expenses and a list of those dealers has also been given by the appellant in their additional submissions. There is no dispute with regard to the advertisement expenses which stands reimbursed by the appellant to the dealer, which already stands factored in the assessable value of the goods. This issue has been considered by various benches of the Tribunal and some of the judgments relied upon by the appellant, specifically held that the advertisement expenses incurred by the dealers on their own accord, is not to be included in the assessable value for the purpose of payment of excise duty. In this regard, we may refer to the decision of this Tribunal in the case of M/S HONDA SEILS POWER PRODUCTS LTD & OTHER VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-III [2013 (10) TMI 450 - CESTAT NEW DELHI] wherein the identical issue was involved and the Tribunal, after considering the submissions of both the parties, held there is nothing in their agreements from which it can be concluded that appellants had enforceable legal right against the dealers to insist on incurring of certain amount of expenses on advertisement and publicity of the appellant’s products. Just a Clause in the agreements requiring the dealers to make efforts for promoting sales of the appellant’s products cannot be treated as a clause imposing legal obligation on the dealers to incur certain level of expenses on advertisement. In view of this, we hold that the impugned orders are not sustainable. The advertisement expenses incurred by the dealers are not to be included in the assessable value unless there is a enforceable legal right of the appellant to insist on incurring of certain quantum of expenses on advertisement by the dealers which is not the facts in the present case. Extended period of Limitation - HELD THAT:- The issue relates to interpretation of the complex provisions of law and the fact, and further that various benches of the Tribunal have considered and decided the said issue, clearly shows that there is no intention to evade payment of duty. Moreover, for invoking the extended period of limitation, the Department is required to establish fraud, collusion, wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with an intent to evade the payment of tax. There is nothing in the impugned order that any of these ingredients stand proved. Hence, the substantial demand up to September, 2010 is barred by limitation. The impugned order is not sustainable in law and therefore, the same is set aside - appeal allowed.
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