TMI Blog2011 (4) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... gent of the other - This is not an acceptable argument. Covenant 25 deals with dealer's margins - So the effect of the clause is that notwithstanding controls exercised by JCBI on final prices at which goods are sold, the Respondent will be eligible for a margin - Covenant 25 itself consists of 5 sentences. The notwithstanding clause applies only to the first sentence and not even to other sentences in the covenant. At any rate it cannot extend to covenant 32 - Held that in the case of impugned sales made directly by JCBI in the territory assigned to the Respondents for which respondent is receiving commission under covenant 25 of the agreement, the Respondent is not acting as an agent of JCBI and the service provided cannot be considered as services provided by a commission agent - Therefore the Appeal of revenue is allowed. - ST/ 727/2007 - ST/150/2011 - Dated:- 7-4-2011 - D N Panda, Mathew John, JJ. For Appellant : Shri Sumit Kumar, SDR For Respondent : Shri Nikhil Agarwal, Adv. Per: Mathew John: This is an appeal by Revenue against the order of Commissioner of Central Excise (Appeals), Chandigarh who reversed an order passed by the Adjudicating Authority. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Whereas JCB is inter alia engaged in manufacture of Construction Earthmoving Machines viz. Excavator-cum-Loaders. Excavators, Loaders Loadalls, including spare parts and accessories thereof ["Products"] and is desirous of marketing its Products throughout the territory of India; and Whereas, JCBI is desirous of appointing an Authorized Dealer for sale and service of its Products (more specifically detailed in Schedule 1 attached hereto) on the terms and conditions contained herein; and Whereas, KRISHNA has represented to JCBI that it is competent to discharge the obligations under this Agreement and possesses the requisite infrastructure to effectively discharge the obligations of an Authorized Dealer, and JCBI acting on the said representation hereby appoints KRISHNA as its Authorized Dealer, on the terms and conditions contained hereunder. Now, therefore the Parties agree and covenant as under: A APPOINTMENT OF DEALER 1. JCBI hereby appoints KRISHNA as its Authorized Dealer (hereinafter referred to as "Dealer") which expression shall mean and include its branches/outlets, agents acting under and authorized by it (details interalia, per Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and engineering infrastructure and skilled manpower to carry out repairs, replacement and after sale service of Products, as per specifications of JCBI. The establishment of Dealer and the infrastructure therein shall be operational during all normal business hours and shall be subject to periodical inspection by JCBI. 10. The Dealer shall maintain and display adequate signs in order to identity itself as Authorized Dealer of Products of JCBI. Each sign shall be of good appearances, in a prominent and appropriate location and shall be strictly in conformity with the Corporate identity Policy/Manual as enforced by JCBI from time to time. 11. The Dealer shall furnish to JCBI, in formats prescribed by JCBI, detailed statement of its financial status and its business activity including sale reports and or such other reports/statements as JCBI may ask for, from time to time. 12. The Dealer shall, at its own cost, maintain a stock of the Products as is deemed adequate by JCBI for effective sale, after sale service and repairs of the Products, to be carried out as per the guidelines issued by JCBI from time to time. 13. The Dealer shall at all tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding refund of freight and insurance cost incurred by JCBI for dispatch from JCBI point to the dealer) and under transit insurance, within 7 days from the refusal to accept the Products. The Parties agree that the obligation of the Dealer to return the Products to JCBI is an addition to and without prejudice to other remedies available to JCBI under law. 22. The Dealer represents and warrants that the Products ordered for by the Dealer are for sale in the ordinary course of business and Dealer has complied with all legal pre-requisites for such sales. Such representation shall form part of each order placed with JCBI. 23. The dealer shall provide for adequate capital funds, lines of credit and net worth sufficient to fulfill its obligations under their Agreement, as per the guidelines established by JCBI and communicated to the Dealer from time to time. 24. JCBI may, in its sole discretion and absolute discretion, require the Dealer and the Dealer shall furnish a security to JCBI on the terms and conditions as specified by JCBI. The security may carry a fair rate of interest. The Dealer undertakes and agrees on the lien of JCBI on the machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e i.e. any liability on JCBI will be excluded on account of any cause beyond the control of JCBI, including act of God or that of any law, rule regulation or Govt. or statutory policy. 28A The provisions mentioned hereinabove are also applicable for all such orders, collected by the dealer on behalf of the company and forwarded to JCBI for execution. The dealer is liable to oversee effective delivery of products and collection of payments and any other statutory forms and dues, if any, favouring JCBI and forwarding the same to JCBI forthwith. D WARRANTY 29. JCBI shall from time to time notify Dealer of its warranty policy on the Products and the obligations of the Dealer thereunder and the Dealer shall comply with the said policy both in letter and in spirit. 30. Each Product shall be dispatched by JCBI in forms with the Warranty Policy and there shall be no other warranty on the Products whether express or implied as to the merchantability or fitness of the Product. 31. The Dealer shall at the time of sale of Product forward the Warranty Certificate issued by JCBI, to the end user and shall affix his stamp thereon. Any claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising out of or in connection with. a. Any act of omission or commission or failure on part of the Dealer or otherwise to obtain any requisite permit/permission to comply with any mandate of law, in force from time to time. b. Any damage, loss arising out of any act of omission or commission on the part of Dealer or his personnel; c. Any unauthorized use or misuse of any Trade Mark, Brand Name, intellectual or other property of JCBI; d. Any damage, claim, loss arising out of any breach of any of the terms of this Agreement and e. Any third party claim or liability arising out of or in connection with any act of omission or commission on part of the Dealer, its agents, employees, servants and persons authorized by Dealer. f. Any breach of the confidentiality clause contained herein. g. The remedy of indemnification under, this clause is in addition to and not in derogation of any other remedies available to JCBI under law. 40. The Dealer hereby unequivocally agrees and covenants that it shall have no claim against JCBI, save as expressly provided herein." 6. There are more c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced above where it is specifically stated that either of the parties shall not act as an agent of the other. Since the Respondent could not have acted as an agent of JCBI, there cannot be a question of acting as a commission agent. Revenue also points out covenants 14, 15, A-9 etc to argue that the role of the Respondent was more than that of a Commission Agent 11. The Respondent on the other hand argues that they are satisfying each of the ingredients of the definition of Commission Agent in the notification. That is they-, (i) cause sale of goods, (ii) on behalf of JCBI (iii) for a consideration which is based on the quantum of such sale. 12. On a careful scrutiny of covenant 25 of the agreement it can be seen that the Respondents are not causing the impugned sales. The impugned sales are caused by JCBI. Respondents are just given a compensation for his opportunity loss when JCBI directly sells to customers in the territory assigned to Respondents. The impugned sales are not made by the Respondents on behalf of JCBI. JCBI is directly selling the goods to customers. There is a consideration paid. This is for the efforts the Respondents make for popularis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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