9911796707
TMI Blog1997 (2) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 to 31-12-1986. During this period, about 65% of the cleaning systems were being sold to M/s. Essanjay Marketing Pvt. Ltd. (for short, EMPL) and 35% of the goods were being sold to other dealers, at similar prices. Such prices having been declared and the same having been approved, appellant was clearing the goods on payment of appropriate duty. Notice was issued to the appellant on 28-7-1987 alleging that EMPL was attending to sale promotion, advertisement, seminars, conferences, free warranty service, maintenance, administration and the like and meeting the expenses and recovering the same from customers by charging higher price, that appellant was collecting interest at the rate of 19% on the receivables not paid during the period 60 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proposal to include the cost of service extended by EMPL and notional interest on rupees two lakhs, in the assessable value. This order is being challenged. 3. The two statements, one of the Managing Director of EMPL and other of one of the Directors of the appellant relied on in the show cause notice do not indicate any nexus between the appellant, on the one hand, and sale promotion activities and advertising done by EMPL. There was no written agreement between them, nor was it suggested in the show cause notice that there was any oral agreement between the parties requiring EMPL to undertake these activities on behalf of the appellant. EMPL has an all India network to promote sales of not only the goods purchased from the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re manufacturer did not offer free warranty service and in its place the wholesaler offered free warranty service. The connection between the manufacturer and free warranty service is clear. There can be no doubt in the circumstances that EMPL was offering free warranty service on behalf of the appellant. In this view, we agree that the expenses so incurred by EMPL in regard to free warranty service have to be added to the assessable value. 5. The law in regard to notional interest on deposits is that to the extent it depresses the price, it has to be added to the assessable value. In other words, the nexus between the deposit and the terms and conditions of the price structure has to be established. [See Lakshmi Machine Work Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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