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M/s. Lakhanpal Ltd. Versus Commr. Central Excise & Customs, Vadodara

2015 (9) TMI 1028 - SUPREME COURT

Valuation - Inclusion of royalty amount - Rule 5 of the Central Excise (Valuation) Rules, 1975 - Held that:- A bare reading of Rule 5 would demonstrate that the additional consideration which flows directly or indirectly from buyer to the assessee ca .....

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act, was untenable and when the assessee is paying the royalty to LNL (buyer) and that too for using the brand name `NOVINO' which belongs to the buyer, the question of treating the same as "additional consideration" within the meaning of Rule 5 and .....

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v. Mr. Somnath Shukla, Adv. Mr. Udit Jain, Adv. Mr. Praveen Kumar, Adv For the Respondent : Mr. K Radhakrishnan, Sr. Adv. Mr. Sanjai Kumar Pathak, Adv. Ms. Rashmi Malhotra, Adv. Mr. Aviral Kashyap, Adv. Mr. B. Krishna Prasad, Adv ORDER First, facts i .....

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al Ltd. (hereinafter referred to as LNL') The said LNL has entered into an agreement with the assessee under which LNL has allowed the assessee to use the aforesaid brand name. For this purpose the assessee is also paying royalty @ 2.5% in respec .....

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show cause notice dated 02.10.1999 from the Commissioner of Central Excise in which it was mentioned that the assessee was paying royalty @ 2.5% for use of the brand name to LNL and the assessee was asked to show cause as to why the amount of royalty .....

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l Excise (Valuation) Rules, 1975. The assessee questioned the veracity of this show cause notice taking number of pleas/contentions. However, none of these contentions found favour with the assessee. The Commissioner, who passed the Order-in-Original .....

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the Tribunal has also relied upon the order of the Commissioner thereby dismissing the appeal. The order of the Tribunal is under challenge before us in these proceedings. Submission is made by the learned counsel for the appellant that Rule 5 will .....

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harged by the seller from the buyer. On the contrary, in the present case, the royalty, which is treated as additional consideration is paid by the seller to the buyer. We find force in this contention of the learned counsel for the appellant which i .....

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