TMI Blog2011 (7) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... , for respondent Per: P.R. Chandrasekharan This appeal is directed against order-in-original No. 28/NRN/TH-II/2003 dated 30.10.2003 passed by the Commissioner of Central Excise, Thane-II. 2. Briefly stated the facts of the case are as follows. 2.1 Ms. Vadilal Dairy International Ltd. (VDIL in short), Tarapur, are manufacturers of ice cream/ice candy falling under Chapter Heading No.21.05 of the Central Excise Tariff. They entered into an agreement dated 31.3.1997 with M/s. Vadilal Milk Products Ltd. (VMPL in short) for sale of marketing rights of ice cream/ice candy and all other products bearing the brand name 'VADILAL' in the States of Maharashtra, Karnataka, Goa, Andhra Pradesh and Kerala for a period of five years for a consideration of Rs.180 lakhs. As per the said agreement, M/s. VMPL were required to undertake advertisement and publicity of ice creams of VADILAL brand and also to incur marketing, selling and organization expenses. The department was of the view that M/s. VDIL, while clearing the goods to M/s. VMPL, did not include in the assessable value the consideration received for grant of marketing rights given to M/s. VMPL and also the advertisement and pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture incurred by M/s. VMPL has been added to the assessable value which is wrong as has been held by the Tribunal in the case of CCE vs. VST Industries reported in 1991 (52) ELT 59. 3.2 As regards advertisement and publicity expenses, the expenditure has been incurred by M/s. VMPL who is the buyer of the goods. As has been held by the apex court in the case of Philips India Ltd. vs. CCE, Pune 1997 (91) ELT 540 (SC), such expenses cannot be included in the value because the advertisement and publicity benefited the manufacturer as also the dealer. Therefore, the expenses incurred by the dealer towards advertising expenses cannot be added to the assessable value in terms of the decision of the Hon'ble apex court in the Philips India case cited supra. 3.3 With regard to marketing and selling organization expenses sought to be included in the assessable value of the products sold by M/s. VDIL, the Advocate submitted that these expenses have been incurred by M/s. VMPL who is a buyer of the goods and these expenses incurred by the buyer in further distributing the products in the supply chain cannot be added to the assessable value of the products sold by the manufacturer to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). With regard to the time bar issue, they relied on the judgment of the Hon'ble apex court in Padmini Products vs. CCE 1989 (43) ELT 195 (SC) and Tamil Nadu Housing Board vs. CCE, Madras 1994 (74) ELT 9 (SC). 4. The learned SDR appearing for the department reiterated the findings given by the adjudicating authority. He submitted that the marketing rights were granted to M/s. VMPL by M/s. VDIL for a consideration of Rs.180 lakhs for a period of five years. This amount received by the manufacturer is a relevant consideration for the marketing of the goods and therefore, has to be necessarily included in the assessable value of the goods. He further submits that as per the terms of the agreement dated 31.3.1997 entered into between M/s. VDIL and M/s. VMPL, vide clause 1: 'VMPL agrees to have the marketing rights for ice-cream and juices manufactured by VDIL. For this purpose VMPL will pay Rs.180 lakhs to VDIL as usage of such territorial rights for a limited period of five years.' Further, clause 8(d) of the agreement states: 'VMPL shall be responsible for all costs, charges and expenses including advertising and sales-promotion that may be incurred for onward transactions.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that as regards sale of marketing rights for a consideration of Rs.180 lakhs in March 1997 they had not received any amount yet from M/s. VDIL. Similarly vide their letter dated 25.10.1999 they had replied to the letters dated 18.5.1999 and 7.10.1999 received from the Superintendent of Central Excise wherein they had communicated that they had not received any amount for the sale of marketing rights. Similarly vide letter dated 28.1.2000 they had once again confirmed that they had not received any amount against the sale of marketing rights in March 1997. From the records it is further seen that the appellant had filed classification list effective from 1.3.1994 wherein they had declared that the goods are manufactured by the appellant but are marketed by M/s. Vadilal Milk Products Ltd. and the goods are bearing the brand name 'VADILAL'. Similarly in the classification list effective from 16.3.1995 also the fact that the goods are manufactured by them but are marketed by VMPL was made known to the department. Again in the classification declaration effective from 28.2.1997 the above information was declared to the department. Thus right from 1994 onwards, the department was fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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