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Maruti Suzuki India Ltd. Versus C.C.E. -Delhi-III

Valuation - whether the advertisement cost incurred by dealer and promotional materials sold to the dealers are assessable value or not? - Held that: - As the issue involved in the matter has already been dealt by this tribunal in appellant's own case M/s Maruti Suzuki India Ltd. Versus CCE, Delhi-III [2016 (8)119 - CESTAT CHANDIGARH] wherein this Tribunal held that advertisement cost incurred by the dealers and promotional materials sold to the dealers are not includible in the assessable value .....

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rred by dealer and promotional materials sold to the dealers are assessable value or not. 2. Heard the Ld. Counsel and we have gone through the order of this tribunal in appellant's own case reported in 2016-TIOL-2217 CESTAT-CHD. As the issue involved in the matter has already been dealt by this tribunal in appellant's own case wherein this Tribunal observed as under: 9. "A perusal of the various judgments relied upon, on behalf of appellants, leads as to the following conclusion on .....

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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 advertisement, campaign is normal. The issue to be considered is whe .....

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cturer and requires to be added to the assessable value. 10. In the present case, relating to M/s Maruti Suzuki India Limited, we find it has been claimed that the advertisement are not done by all the dealers; and even in respect of dealers undertaking such advertisements, the extent of expenses does not get linked to or proportionate to number of vehicles sold by them; it was claimed that the dealers have incurred expenses varying from 0.0070% to 0.233% of total sale value. In view of the abov .....

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acceptable. Such cancellation cannot enable recovery of dealer's share of cost of advertisements. Therefore, this case is squarely covered by the decision of the Hon'ble Supreme Court in the cases of Philips India ltd. V. CCE, Pune reported in 1997 (91) ELT 540 (SC)=2002-TIOL-127-SC-CX and the decision of Surat Textile Mills (2004 (167) ELT 379 (SC) =2004-TIOL-40-SC-CX cited supra wherein it has been held that the advertisement expenditure incurred by a manufacturer's customer can be .....

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at all times during the currency of this Agreement use its best endeavors to promote sales of the products within the Territory and to secure and maintain the confidence of Customers in the products and to enhance the reputation of the company and the products. 29. Advertising The dealer shall advertise and/or promote products. Parts and service facilities in detailed manner as to secure adequate and effective publicity to the satisfaction of the company at its own expense. 29.1 The dealer shal .....

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mmediately withdraw the same at its expense and not repeat it. 30. Display at outlets: The Dealer shall display signs at the outlets indicating its status as an Authorized Dealer as per the corporate identity of a type approved or issued by the Company and in such number as the Company may reasonably require. The Dealer shall maintain the outlet and al/ displays in and around the outlet keeping in view the image of the company and as specified by the company from time to time. 31. Promotional Li .....

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al remedy is available to the manufacturer. The contention 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 an enforceable legal right is acceptable. Such cancellation cannot lead to situation enforcing purchase of promotional materials for the past. The facts of the case mentioned in M/S Kinetic Engineering Ltd. Vs. CCE, Aurangabad repor .....

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