Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

M/s Maruti Suzuki India Ltd. Versus CCE, Delhi-III

2016 (8) TMI 119 - CESTAT CHANDIGARH

Valuation - inclusion of advertisement cost incurred by the dealers and promotional materials sold to the dealers - Held that:- advertisement cost incurred by the dealers and promotional materials sold to the dealers are not includible in the assessable value. - Decided in favor of assessee. - E/2049/2008 - Final Order No. 60143/2016 - Dated:- 25-5-2016 - Mr. Ashok Jindal, Member (Judicial) and Mr. Raju, Member (Technical) Ms. Swati Gupta, Advocate for the appellant Mr. V. Gupta, A.R. for the re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, (b) The appellant is carrying out main advertisement at the national level at their own expenses. The amount of expenses so incurred is included in the selling price of the finished goods and excise duty is paid on such price. (c) The appellant has written agreements with their dealers which envisage that the dealers shall at all times during the currency of the agreement make efforts to promote the product and its reputation within the allotted territory. (d) The appellant used to undertake .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

curring of expenses by the dealers under JASP is arising out of the dealer's agreement and the JASP policy; the dealer incurs the expenses under the terms of the agreement; these activities are carried out by the buyers only on behalf of the manufacturer and the expenses as incurred on behalf of the manufacturer. Therefore, these expenses were treated as consideration for sale and accordingly differential duty and penalties imposed. 3.2 The appellant also provides various promotional materia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ant is before us. 2. The Ld. Counsel appearing on behalf of the appellant submits that in their own case for the earlier period on the identical issue this tribunal has held that advertisement cost incurred by the dealers and promotional materials sold to the dealers are not includible in the assessable value of the appellant. The said order has been reported in 2008 (232) ELT 566 (Tri, Delhi), therefore, the issue has already been settled by this tribunal. The impugned order is to be set aside. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rst category is the advertisement done by the manufacturer on their own and at their own expenses. Such advertisements make the product visible and known to the prospective buyers. Such advertisement not only benefits the manufacturer but also the dealers. As such advertisements make the job of selling relatively easier. There are 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dded to the assessable value. When the contract envisages such incurring of expenses by the dealer and failure to incur such expenses give a right to the manufacturer to get the advertisement done on their own and recover the expenses from the dealer, such an arrangement cannot be considered as an option. Such expenses by the dealers would be payment basically on behalf of the manufacturer and requires to be added to the assessable value. 10. In the present case, relating to M/s. Maruti Suz .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the manufacturer; that the assessee has no enforceable legal right to insist on incurring such advertisement expenditure. The contention of the Department that there is no option available to the dealers does not stand proved. The stand of the department that the failure on the part of the dealer may lead to the cancellation of dealership and therefore there is a enforceable legal right is acceptable. Such cancellation cannot enable recovery of dealer s share of cost of advertisements. Therefor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of the incurring of such advertisement expenses by the customer. 11.1 Regarding the issue of reimbursement of cost of complimentaries in the case of M/s. Maruti Suzuki India Limited, as per the Ld DR, the same are done in pursuance of clauses 28, 29, 30 and 31 of the dealership agreement which are re­produced below : 28. Promotion The Dealer shall at all times during the currency of this Agreement use its best endeavours to promote sales of the Products within the Territory and to sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9.2 Undesirable Advertising The dealer will not advertise or promote the Products or Services in such a way as may annoy cause injury to or detract from the company or the Products or Services or other Authorised Dealers. Should the Company consider that any advertisement announcement or other advertising or promotional material to be undesirable. The Dealer shall immediately withdraw the same at its expense and not repeat it. 30. Display at Outlets The Dealer shall display signs at the outlets .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

such literature relating to the Products and the Services as the Company may specify for handing over to customers on demand. 11.2 We have not been shown that these sales of promotional materials are directly linked to sale of the vehicles. It has also not been shown that if the dealers do not buy such material for stocking and distributing them to the buyers any legal remedy is available to the manufacturer. The contention that there is no option available to the dealers does not stand pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version