TMI Blog2009 (1) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... firming the demand of differential duty of Rs. 43,62,961/- on the ground that the trade discount extended by them to the dealers is actually commission along with interest and equal amount of penalty, penalty of Rs. 5 lakhs on Shri D.L. Dedhia and penalty of Rs. 2 lakhs on Shri Dinesh Bale, Manager. The moot point to be decided in this case is whether the dealers to whom the appellants extended trade discount were actually not dealers but consignment agents. 2.1 Shri D.P. Bhave, ld. Advocate on behalf of the appellants submitted that the period involved for which differential duty has been confirmed by the Commissioner is from 1995 to September, 2000. First of all he submits that the demand is barred by limitation in view of the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually a sale and the Sales Tax Department treated the same as such. Form C is meant for dealers and Form F is meant for consignment agents as per Sales Tax enactments. Further he also submits that the dealers had paid sales tax and were assessed to sales tax during the relevant years. The appellants were exempt from payment of sales tax during the period as Gujarat Government had extended the benefit. According to him this is another point which has not been considered by the Commissioner at all. 2.2 As regards the other two officers of the company, the ld. Advocate submitted that Shri Dedhia, Chief Executive (Finance) was sitting in Mumbai and was not involved in day to day operations and he was the head of the Department and theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this conclusion he has also given the reasons in Para 34 of his order which are reproduced below :- (i) It is clear from various conditions of the agreement entered into between M/s. AIL and dealers that M/s. AIL were to pay remuneration or commission @ 2.5% on the net value of sale for the services provided by them. (ii) The conditions of said agreements were similar to the conditions of agreements entered into between M/s. AIL and the consignee agents (For HSR). By virtue of these facts the so called dealers appeared nothing but only consignee agents with different terminology. (iii) It is quite evident that discounts paid to the so called dealers were only in lieu of marketing and selling expenses incurred by them on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to hypothecate or create any lien on the said products. The same (b) The remuneration to the dealer was in the form of Commissioner equivalent to 2.5% of the net sales value Remuneration for all services rendered as consignment agent of the principals shall be decided by principals and the same shall be subject to change from time to time as per the principal s sales policy. (c) The dealer was required to own and maintain suitable warehouse to store excisable goods. The same (d) They were required to maintain suitable sales force. The same (e) They were required to take steps to ensure safe, storage including insuring against fire, earthquake. The same 4.3 The main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly meant for protecting the rights of the appellants as an unpaid seller and it cannot be held to mean that the appellants retain the right to deal with the goods till it is sold by the dealer. Once payment was made, the dealer is put under no restriction to deal with the goods. Further, the other points raised by the ld. Advocate that Form C was obtained and sent by the dealer and Form C is meant for dealers, the dealers raised invoices in their own name and the dealers paid sales tax and subjected themselves to sales tax assessment support his views and support the argument that the transactions in this case have to be treated as between the dealer and the manufacturer. The remaining points as already mentioned by us are basically dea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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