TMI Blog1999 (6) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... lling plywood of alleged inferior quality ( X grade) at the price of prime or superior quality, although duty was paid at the time of clearance of the goods from its factories at the price applicable to the former inferior grade. 1.2 Under-valuation and evasion of Central Excise duty as given below was alleged under the following heads :- (a) It was alleged that the appellant cleared about 10% goods for sales at factory-gate which were deliberately put at a far lower level, even below the cost price to establish price under Section 4 (1)(a) of the Central Excise Act, 1944. Loss incurred in these were more than made up by selling remaining about 90% from its various depots all over India by upmarking the price to the extent of 100% to 250% sales at the factory gate were not open to all but only to some or certain selected dealers. It was alleged that evasion of duty during the period February 1990 to June 1994 was to the tune of Rs. 18,47,91,347.00. (b) It was also alleged that about 50% of the total sales of the appellant were made from the Depots to one M/s. Landle Co. (hereinafter referred to as Landle) at discounts varying from 20 to 25%) and in case of inferior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade at that price. We consider it appropriate to reproduce the Commissioner s findings on this aspect, since these have been challenged by the ld. Advocate for the Respondent that there is no estoppel against the Revenue in arguing against the said finding in support of his case while resisting the Appeal on other points. In fine, I find that the stand of the Deptt. for raising a differential amount of Rs. 18,47,91,347/- is unsustainable for the following reasons :- (a) Private costing recovered during the search can not form a basis for ariving at the correct value for all goods manufactured by M/s. Kitply. (b) Multiplying the entire clearance as reflected in the RG-I/RT-12 of the company by the highest price in couple of bills recovered is neither ethically acceptable nor arithmetically correct as huge stocks are still lying unsold in the depots on the day of the raid. It can not be taken for granted that they will all be sold at this highest price. At best, this is a mere presumption. Besides all clearances have not been sold at this highest price; this is a matter of fact as could be seen from bills produced by M/s. Kitply. It is a fact that some bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have resulted in higher assessable value at the factory gate. There is thus a direct nexus between the higher discount given to Landle by the appellant and the minimum quantity of products to be supplied to Landle by agreement with the latter on the one hand and the additional consideration of advertisement cost incurred by Landle which in the normal course would have otherwise been incurred by the appellant on the other hand. Hence the amount of duty, as alleged to be evaded on this count was confirmed by the Commissioner. 1.6 Similarly, in respect of additional consideration of notional interest on the interest-free security deposit made by Landle, the Commissioner has found that appellant s plea that deposit was taken as a security or as credit facility inasmuch as huge stocks of goods were sold to Landle is not correct because such a credit was not taken from other buyers and credit facility for a certain period was given to others as well. Hence the confirmation of alleged duty evasion on this account. 1.7 As regards sale of X grade products as prime quality from seven depots for which evidence was adduced by the Revenue in the show cause notice and there being n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the total additional consideration (advertisement plus interest) during the above period was to the tune of Rs. 25 crores. In other words if the entire transaction is looked into in the proper perspective it would show that the appellants have charged and recovered a sum of Rs. 120 crores plus 25 crores i.e. 145 crores from Landley, whereas they could have charged and recovered on the sale invoice itself a sum of Rs. 148 crores from Landle (i.e. list price less 20% as charged to the dealers ex-depots). Hence assuming without admitting that the advertisement expenses and the alleged national interest are to be considered as additional consideration, the same would not in any way affect the ex-factory price charged by the appellants. The impugned order is therefore liable to be set aside. 2.1.3 Another shade of the aforesaid argument put forward by the ld. Advocate is that question of inclusion of advertisement expenses and notional interest could have justification if and only if the prices to Landle had been taken as the basis to form the normal price under Section 4(1)(a) and to arrive at the assessable value therefrom. Admittedly, submits the ld. Advocate, the prices to Land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work directly or indirectly for any manufacturers of the products and substitute products in any other part of India. (8) The second part shall sell the production of the Company Retail or wholesale, at any price negotiated by him which however shall in no case be less than the minimum price fixed by the first part for each of the products of the company. Such pricing shall be worked out to the second part by the company after deducting all discount whichever agreed to be given for each product of the first part considering the expenses for godown delivery, discount and all other sales promotion expenses which the second part is required to undertake while effecting sales of the product of the first part. (9) The second part agrees to market following products of the first part in its area particularly mentioned in the agreement and at a fixed discount for the period for which this agreement is drawn. However, the price is subject to change as per policy of the company of the first part. Products Discounts Kitply 25% Lohit Ply 25% Shuttering Ply 25% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the cost of the second part. (13) The second part will continue to keep permanent deposit of a Crores (Rupees Two Crores only) with the first part as security to this agreement for the due performance of the terms of this agreement and the said security will be with the first part as security and for the period this agreement remain valid. Such security will carry no Interest for the total period of security. In case there should arise any dispute with respect of any matter regarding which any deduction is sought to be made by the first part. The said dispute shall be settled either between first part and second part amicably or shall be referred to the arbitration of a Solicitor company acceptable both to the first part and the second part which shall be conducted at Calcutta. 2.2.2 A ld. Advocate submits that perusal of the above clauses of the agreement do not leave by manner of doubt about the nexus of higher discount and a supply of minimum quantity per month stipulated against the consideration of advertising the appellant s products throughout India including on all India T.V. Network and the permanent deposit without any interest liability on the appellant. He submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional consideration, that is the end of the matter, because price at the factory gate cannot be said to have been influenced by any additional consideration and price at the factory was the sole consideration for sale. It is in the absence of any allegations, in Indian Oxygen (supra) regarding sales at depots, on additional consideration, that the Apex Court decided that if the price at the factory gate under Section 4(1)(a) is available, one need not go to the price at Depot. But the factual situation in the present case is totally different. There is a subsisting agreement between the appellant and Landle for supply of a minimum quantity of the goods per month at a fixed discount which is admittedly far higher than the discount given to other dealers in consideration of the advertisement and interest-free deposit of rupees two crores. Therefore; price of goods for supply to Landle (though not specifically earmarked as such at the point of removal from factory) is vitiated ab initio at factory gate by virtue of the terms of the said agreement on the ground that the sale-price at the factory gate has not taken into account the additional consideration flowing back to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice for the sale of the goods and only under such a situation sub-section (1)(a) would come into play. If the price in a particular transaction is not the sole consideration flowing directly or indirectly from the buyer to assessee-manufacturer, either in cash or any other form, the additional consideration quantified in terms of money value is to be added to the price declared by the assessee for determining the normal price of the goods. In these circumstances the Tribunal was perfectly justified in upsetting the decision of the Collector and confirming the decision of the Assistant Collector when the latter held that notional rate of interest on the advances given by the wholesale buyer. Ponds (I) Limited, to the appellant should be reloaded in the price so as to reflect the correct price of the goods sold by the appellant. The Tribunal was right when it considered the fact that after agreement entered by the appellant with Ponds (I) Limited, the appellant got large amounts of Rs. 75 lakhs in 1980, Rs. 100 lakhs in 1981 and Rs. 200 lakhs in 1982 free of interest and these advances were maintained at the same level on the first working day of every month as specifically provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fallacy in the argument. Object of Section 4 is to determine assessable value for the purpose of charging Central Excise duty on goods which are liable to duty on ad-valorem basis. Sale price of the goods in the course of whole-sale trade where price is the sole consideration is the basis of determining such value under Section 4(1)(a). This Section also provides that different prices can be charged from different classes of buyer. Landle, is undisputedly a bulk buyer of the goods manufactured by the appellant. Landle therefore forms a separate class of buyer, as held by the Apex Court in Metal Box (supra) - Para 12 thereof. The Apex Court held therein as follows :- The buyer who purchases small quantities of goods may stand in different class as compared to a buyer who purchases 90% of manufactured goods. He would certainly form a separate and distinct class. We also observe that the agreement does not provide that he must purchase the goods from depots only. All it says, inter alia, that a certain minimum quantity of goods per month manufactured by the appellant has to be supplied to Landle. There is no restriction on further purchases. Being a bulk buyer and thereby formi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red from the factories for the seven depots in question were mixed up along with non- X grade goods and all goods from those seven depots were sold as non- X grade. It is therefore, doubtful whether the so-called X grade cleared to the seven depots and sold therefrom were really X grade goods. Appellants s argument to confine the question of sale of X grade to valuation alone is not correct. The question is of misdescription in the quality of goods cleared from the factory for sale from the seven depots. In our view, the demand is sustainable. 4.2 A half-hearted attempt has also been made to plead that this demand is barred by time on the ground that a similar allegation was made in the some earlier proceedings but with reference to Kitply marine grade and defective marine grade. The present allegation is with reference to the Kitply X in place of defective marine grade. There can be no question of time bar in the facts and circumstances of the case. It is not the case of the appellant that it had declared to the department or brought to the latter s knowledge any fact to the effect that it is selling X grade goods from the seven depots as normal goods and yet the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the appellant and consequently the proposed demand by observing that the department has not been able to prove that the ex-factory price was unnaturally low. She has concluded that since the Department has not been able to prove with documentary evidence that the ex-factory price declared is artificially low, the claims of the party for applying the ratio of the decision in Indian Oxygen v. Commissioner of Central Excise as reported in 1988 (36) E.L.T. 723 is acceptable. The conclusion of the Commissioner and the basis for the same have been reproduced on pages 5, 6 of the Order of the ld. Technical Member. The question which arises is that having accepted the genuineness of the ex-factory price declared and approved by the appellant, the Commissioner was justified in going one step further and increase the assessable value in respect of sales made to M/s. Landle by including the advertisement expenses made by the said dealers. As per records, only 10% sales have been made at the factory gate. These 10% sales have been made the basis for the assessable value in respect of remaining 40% sales made to other dealers from the factory gate. It is very important here to take note of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dle can be said to be an extra consideration for the goods purchased by him. It is not as if the entire advertisement of the product is done by the said dealer. The appellant are also doing a lot of advertisement on their own account through TV Network and other media and incurred an expenditure of substantial amount which the appellant had reflected in their cost sheets. This stand of the appellant taken by the appellant before the adjudicating authority has not been rebutted by the department either in the order or during hearing before us. From the records, it appears that M/s. Landle is a Public Limited Company and as a separate legal entity has entered into an agreement with the appellant for the marketing of their product sold to them on principal to principal basis. The said agreement as contended by the appellant is registered with the Registrar of Companies and Sales Tax authorities etc. The advertisement done by M/s. Landle certainly benefited him also as dealers. Apart from promoting the product of the manufacturers, dealer s goodwill also gets enhanced and in turn, his business goes up. It is not unknown for dealers to advertise their business activities so as to attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 to M/s. Landle were to the tune of Rs. 120 crores), a pre-deposit of Rs. 2 crores can t be made the basis for establishing any link or nexus between the two. Every manufacturer would safeguard his interest in any business deals. Amount of Rs. 2 crores may seem huge when considered in absolute terms but relative to the total sales to Landle, it makes only small percentage. The revenue has also raised another point that no such deposit was taken from any other dealer. I accept the appellants explanation that the other dealers being small and lifting little quntities at one time, there is no danger of the dues becoming irrecoverable from them. 11. The dealers M/s. Landle being the bulk purchaser of the appellants goods is no reason for adding the advertisement expenses incurred by M/s. Landle into the assessable value. The two have entered into an agreement based on principal to principal basis incorporating the entire terms and conditions therein. It is not the department s case that the two are related to each other or the agreement between the two is not genuine. 12. Similarly offering higher discount from the list price to M/s. Landle only reflects the normal business pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abad reported in 1997(89) E.L.T. 65 (Tribunal) = 1996 (16) RLT 524 (CEGAT A), (I was one of the Members) it was laid down that the advertisement expenses incurred by the distributor after the purchase of the goods is not to be added in the assessable value. In the said case also, the distributor had kept interest free deposit of Rs. 5 lakhs with the manufacturer and the assessee was to compulsorily sell 90% of their goods to the distributor. In the said case the two partners of the appellant firm were the wives of the two directors of the distributor company whereas there is no such allegation in the instant case. As such, the present case stands on a better footing. 14. In the case of Regency Ceramics Ltd. v. Commissioner of Central Excise, Guntur reported in 1996 (67) ECR 418 (Tribunal) = 1996 (16) RLT 806 (32B), the agreement entered into by the manufacturer and the dealer, a condition precedent for appointment was that the local advertisement charges are to be borne by the dealers as per the guidelines of the manufacturer. Clause 9 of the agreement in the said case of Regency Ceramics Ltd. read as under :- You shall arrange display of our product at various places the assi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the case of Philips India Ltd. v. Collector of Central Excise, Pune reported in 1997 (91) E.L.T. 540 (S.C.) = 1997 (19) RLT 471 (S.C.) It has been observed in Para 5 of the said judgment that the advertisement which the dealer was required to make at its own cost benefitted in equal degree the appellant and the dealer and that for this reason the cost of such advertisement was borne half and half by the appellant and the dealer and making deduction out of the trade discount on this account was therefore uncalled for. In the instant case, though the advertisement expenses incurred by the dealer have not been shared by the appellants but the appellant has, on its own incurred expenses towards advertisement of its product. As such, the ratio of the said decision applies and the advertisement expenses of the dealer cannot be made liable to duty. 16. Reference is also made to the decisions in the case of M/s. Raymond Woollen Mills v. C.C.E. - Pune -1997 (20) RLT 251 (S.B.) and Delstar Private Ltd. v. Collector of Central Excise, Pune reported in 1998 (103) E.L.T. 302 (Tribunal) = 1997 (20) RLT 374 (CEGAT S.B.) which are also to the effect that advertisement cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (T) = 1996 (15) RLT 697(A) in the case of Triveny Engineering Works Ltd. v. Commissioner of Central Excise, Allahabad and in the case of M/s. MIL Controls Ltd. v. Commissioner of Central Excise, Cochin reported in 1997 (19) RLT 681 (CEGAT-SZB). Now the two factors required to be looked into in the instant case are (a) as to whether the ratio laid down by the Hon ble Supreme Court in the Metal Box case is applicable to the facts of the case under consideration and (b) whether the deposit of Rs. 2 crores by Landle free of interest has influenced the sale price to the said dealer. Taking the first issue first, it is seen that in the case of Metal Box, the facts were slightly different. The facts, as detailed in the Tribunal s order 1989 (39) E.L.T. 79 (T) = 1995 (6) RLT 527 (CEGAT-A) are that M/s. Metal Box were supplying their product metal containers to different cosmetic manufacturers including M/s. Ponds (I) Ltd. and the price declared was on the basis of contract/purchase orders of the buyers. The price so declared and claimed for approval in respect of each buyer i.e. cosmetic manufacturer was after claiming certain deductions from the gross selling price. Disparity between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory gate has been accepted by the department in respect of other dealers. As such, whether the goods are subsequently sold to various dealers by higher discounts or by lower discounts cannot be made the basis for re-determining the assessable value. The effect of demanding duty on the interest on the advance deposit is re-opening and re-determination of the otherwise approved assessable value in so far as one dealer is concerned. This is the basic difference between the Metal Box case and the instant case. Whereas different prices charged from different buyers was the basis for arriving at the factory gate in Metal Box case (as the price list was filed in Part (II) the same is not the situation here. Next, it is to be seen as to whether this deposit of Rs. 2 crores has, in any way influenced the sale price to M/s. Landle or the same is to be considered as security deposit towards any future default of payment by the dealer who is lifting sufficient quantities of plywood from the appellants depots. This question in fact is not important the duty having been paid at the assessable value ascertainable at the factory gate and found to be genuine by the adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Collector on this submission of the appellants. Either the ex-factory price has to be adopted for sales to depots or the sale price from depots to the dealer has to be picked up and worked backwards to arrive at the assessable value after allowing the admissible deduction. Expenses incurred on advertisement and interest on advances cannot be straight away added to the admitted ex-factory price in respect of one dealer. I find sufficient force in the arguments of the ld. Advocate for the appellant made in this respect. 19. As regards the demand of duty of Rs. 58,96,580/- confirmed on the ground of misdeclaration in the quality of the goods cleared as X grade from the factory and sold as good quality grade from seven sale depots. I fully agree with the views expressed by ld. Member (T). Accordingly, duty of Rs. 58,96,580/- is confirmed against the appellant. 20. As regards the limitation the appellants have submitted that the earlier Show Cause Notices dated 9-10-1985 and 9-4-1989 issued to the appellants [when it was known as M/s. Sudharshan Plywood Industries Ltd. and Art Plywood Industries Ltd. as the same were merged and named as Kitply Industries Ltd. effective from 5th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of any amendment in law, the department can issue notice only when it finds that the person concerned is guilty of suppression of material facts or misstatement or misrepresentation. (iii) When the factory gate sale is admitted, the Department is duty bound to assess the tax on the basis of the factory gate sale as provided under Section 4(1)(a) of the Act. Challanging the present proceedings as time bar, the appellant has drawn attention to their ground No. I. 4, which is as under :- 1.4 The demand on this account is also liable to be set aside on the question of time bar. A similar allegation was made in the earlier proceedings but with reference to the Kitply Marine grade and defective marine grade. The present allegation is with reference to the Kitply X in the place of defective marine grade. But for the description of the goods, the allegation remains one and the same. When all the facts are available with the Department and the further fact that the sales are made from the depots at a higher price and having come to the conclusion that the sale price ex-depot is not relevant, inasmuch as the ex-factory price is genuine and acceptable, there being no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to evade payment of duty. I also find that though this point of limitation was argued by the appellants before the Collector, the same has not been dealt with by the adjudicating authority. However, taking note of the fact that the similar show cause notices making similar allegations having been earlier issued to the appellants and having been quashed by the Guwahati High Court, it cannot be said that the department did not had any knowledge of the practice of sale adopted by the appellants. Accordingly I hold that the extended period of limitation was not available to the department in respect of the first two allegations of advertisements expenses and entries on deposits. 21. However, I observe that the benefit of limitation would not be available to the appellants in respect of the allegations made with reference to substitution, Kitply (X) inplace of defective marine grade. I find that allegations as regards substitution and clearances of prime quality goods with the defective goods were there in the earlier show cause notices, the said allegations cannot be made the basis debarring the department from similar allegations made in future if the appellants continue with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIFFERENCE OF OPINION 24. [Order per : Lajja Ram, Member (T)]. - The difference of opnion referred to me in these two appeals filed by (1) M/s. Kitply Industries Ltd. (hereinafter referred to as the assessee , the appellants or M/s. Kitply), and (2) Shri P.K. Goenka, is as under :- (1) Whether the demand of Rs. 7,05,95,368.00 confirmed by including in the assessable value, the advertisement expenses incurred by M/s. Landle Company is required to be sustained or not. (2) Whether the demand of duty of Rs. 48,48,500.00 confirmed by including the interest on deposits made by M/s. Landle Company in the assessable value of the goods is to be set aside in toto as held by Member (J) or the same is required to be lowered to Rs. 43,43,500.00 as held by Member (T). (3) Whether the penalty of Rs. One Crore imposed on M/s. Kitply, and penalty of Rs. One lakh imposed on Shri P.K. Goenka is liable to be confirmed as held by Member (T), or the same is required to be reduced to Rs. 10 lakhs and set aside respectively, as held by Member (J). 25. The assessee having three manufacturing units in the jurisdiction of Commissioner of Central Excise, Shillong was engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under-valuation that the stand of the Department for raising a differential amount of Rs. 18,47,91,347.00 was un-sustainable. The ld. Commissioner of Central Excise noted that since the Department had not been able to prove with documentry evidence that the ex-factory price declared was artificially low, the claim of the assessee for applying the ratio of the decision in the case of Indian Oxygen v. C.C.E - 1988 (36) E.L.T. 723 (S.C.) was acceptable. With regard to advertisement expenses, it was held that they were to form part of the assessable value and that un-due benefits had been shown to M/s. Landle to enable them to bear advertisement expenses. The demand of Rs. 7,05,95,368 on account of non-inclusion of advertisement costs incurred by M/s. Landle in the assessable value was confirmed. The argument that the deposit of Rs. 2 crores had been taken for credit facilities was also not found acceptable and the demand of. Rs. 48,48,500.00 on this account was confirmed. Further, a demand of Rs. 58,96,580 was confirmed on account of substitution of grade in different depots. A penalty of Rs. 1 crore was imposed on M/s. Kitply and Rs. 10 lakhs on Shri P.K. Goenka, Managing Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich were in addition to the 50% sales made to M/s. Landle which were the subject matter of the present appeals. Relying upon the Supreme Court s decision in the case of Indian Oxygen Ltd. - 1988 (36) E.L.T. 723 (S.C.), the Member (J) observed that if the assessable value in respect of the sales to the extent of 50% (10% factory gate sales and 40% sales made to other dealers (other than M/s. Landle) from the depots/branches) was available at the factory gate then there was no reason why the same value should not be made the basis for charging duty in respect of the other sales to the extent of 50% made from the depots/branches to M/s. Landle. She also agreed with the argument of the appellants that interest free deposit of Rs. 2 crores was a method of pre-payment of part of the value of goods lifted by M/s. Landle. With regard to the advertisement cost, she observed that it, apart from promoting the product of the manufacturers, also enhanced the dealers goodwill and in turn the bussiness of the dealer also went-up. Reference among other decisions had been made to Supreme Court s decision in the case of Philips India Ltd. v. C.C.E, Pune, 1997 (91) E.L.T. 540 (S.C.) = 1997 (19) RLT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o other independent dealers. M/s. Landle was their bulk buyer and under an agreement was entitled to a higher discount. They were also under obligation to incur expenditure on advertisement and also to make a deposit of Rs. 2 crore with the appellants. There was no allegation that the factory gate price was not genuine. He submitted that the factory gate price was required to be adopted for all their sales. He relied upon the Tribunal s decision in the case of Collector of Central Excise v. Indian Oxygen Ltd. - 1989 (41) E.L.T 610 (Tribunal), wherein the Tribunal had held that when the price ex-factory was ascertainable, the assessments should be in terms of that price. He argued that if the cost of advertisment and notional interest was to be taken into account then the price will go beyond the price charged from the dealers. He referred to the Tribunal s decision in the case of Racold Appliances v. C.C.E, Pune - 1994 (69) E.L.T. 312 (Tribunal) wherein the Tribunal had held that the advertisement charges were not includible in the assessable value and that when the goods were sold both at the factory gate and also through depots, the ex-factory wholesale price was to be the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured by M/s. Kitply, on account of the advertisement expenses incurred by M/s. Landle for advertising the plywood manufactured by M/s. Kitply, and the interest free deposits given by M/s. Landle to M/s. Kitply. The Commissioner of Central Excise, who had adjudicated the matter had held that the ex-factory price for factory gate sales as declared by the assessee was the genuine price and was acceptable in view of the Supreme Court s decision in the case of Indian Oxygen Ltd. v. C.C.E - 1988 (36) E.L.T. 723 (S.C.). The declared assessable value under Section 4(1)(a) of the Central Excises Act, 1944 (hereinafter referred to as the Act ) was found to be correct and acceptable. The demand for differential duty of Rs. 18,47,91,347 was found to be un-sustainable. The ld. Sr. Advocate had mentioned that against this finding of the adjudicating authority the Revenue had come in appeal before the Tribunal. This appeal by the Revenue was not heard by the Tribunal along with the appeal by the assessee. The appeal was said to have been filed by the Revenue in February, 1998 while the matter was heard by the referring Bench on 24-9-1997. I, therefore, cannot deal with this aspect of the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and interest free deposit, he held that the price of the plywood for supply to M/s. Landle was vitiated ab initio at factory gate by virtue of the terms of the agreement, on the ground that the sale price at the factory gate had not taken into account the additional consideration flowing back to the appellants/manufacturer. I however, find that the higher discount had not been considered inadmissible. For advertisement, it has not been established that it was not for the benefit of the customer, M/s. Landle who were lifting about 50% of the production of M/s. Kitply. Supply of about 50% of the production to M/s. Landle could not be considered as an additional consideration for M/s. Kitply. A higher discount to the customer could also not be considered as an additional consideration to the manufacturer. Additional discount is at the cost of the manufacturer. The ld. Member (T) now Vice President had referred to Para C7 of the appeal wherein it had been mentioned that the appellants had given extra benefit of about Rs. 28 crores to M/s. Landle as compared to other dealers and in lieu thereof had got a benefit of about 25 crore. This benefit is with regard to the advertisement c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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