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M/s Rathi Transpower Pvt. Ltd. Versus Commissioner of Central Excise, Pune-III

2016 (3) TMI 158 - CESTAT MUMBAI

Transaction value as defined under Section 4(3)(d) - whether includes cost of advertisements or publicity - Held that:- We find that the terms of agreement are very clear that it is an option to the dealer to obtain advertising materials from the appellant at 50% of the cost. It is not disputed that only some of the dealers are availing these option. That being so, it can safely be concluded that it is not mandatory for the dealers to take the advertising materials from the appellants and to sha .....

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f the incurring of such advertisement expenses by the customer - Decided in favour of assessee - Appeal No. E/1658/05 - A/85730/16/EB - Dated:- 10-2-2016 - SHRI SS. GARG, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri S. Narayanan, Advocate For the Respondent : Shri V.K. Shastri, AC (AR) ORDER PER: RAJU The appellants are manufacturer of excisable goods and were selling the products to various distributors and dealers. The appellants had agreement with some of the .....

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d its sale of own business which is done in an independent capacity and dealer/distributor cannot bind the manufacturer on any account as sale is on principal to principal basis. (7) …. (8) In order to maintain uniformity in advertisements, etc, if the dealer/distributor desires to have such advertisements carried out to promote his own business, if need be, can contact RTPL who based on requirements can share the advertisement material and the costs of which will be recovered from the sa .....

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ts of products to ensure that customer do not understand the product sold differently, in terms of quality and nature and commercial aspects of products sold and including the manner, style, and standard of sales promotion measures which needs to be consistent with business ethics, RTPL suggests in mutual interest of business, prior approval of the mode and message of the advertisement. 2. A demand show-cause notice was issued to the appellant seeking to add the amount recovered from the dealers .....

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ppellants are in fact giving the said material to the dealers at 50% of the cost. It was argued that sharing of cost is only subject to the requirement of the advertising material by the dealers and it happens only in respect of few of the dealers. Learned Counsel relied on the decision of Hon'ble Supreme Court in the case of Philips India Ltd. - 1997 (91) ELT 540 (SC). He also relied on the decision of the Tribunal in case of Ford India Pvt. Ltd. - 2007 (216) ELT 530 (Tri-Chennai) and Marut .....

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0% of the cost. It is not disputed that only some of the dealers are availing these option. That being so, it can safely be concluded that it is not mandatory for the dealers to take the advertising materials from the appellants and to share the cost of such materials. In these circumstances, the Tribunal s decision in case of Maruti Suzuki India Ltd. (supra) becomes squarely applicable. Para 9 and 10 of the said decision reads as follows: - 9. A perusal of the various judgments relied upon, on .....

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re also advertisements which may be done exclusively by the dealer in their area out of margins received by them. Even such advertisements benefit both the dealers and to some extent the manufacturer. The joint advertisements are, therefore, can be considered to benefit both the dealers and the manufacturer. Such joint advertisement arises out of legitimate business consideration; this arises out of the mutual interest in maximizing the sale of products. Sharing of expenses on the joint advertis .....

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