TMI Blog2017 (3) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... o vigorously promote, develop and maintain sales of the product and parts to the satisfaction of and in the manner required by the appellant cannot be treated as the clause which gives an enforceable legal right to the appellant to insist on incurring of certain quantum of expenses on advertisement by the dealers. For this reason also, the advertisement expenses recovered from the dealers would not be includible in the assessable value - demand of duty with interest and penalty set aside - appeal allowed - decided in favor of assessee. - E/765, 969/2011 - A/60290-60291/2017-EX[DB] - Dated:- 15-2-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri P.K. Ram, Advocate - for the assessee Shri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm any obligation under this agreement, in the opinion of Hero Honda or does not rectify such defaults, if capable of remedy, within 30 days, following the day of notice pursuant to Article XXII hereafter, Hero Honda may forthwith terminate the agreement by giving a written notice to this effect. 3. Though the dealers incur expenses for advertisement of the assessee's product on their own, in the present case, there is no dispute about includibility of such expenses incurred by the dealers in the assessable value. In the present case, the dispute is in respect of those dealers, who, for various reasons, cannot arrange the advertisements and request the assessee to organize the advertisement of the products in their area and in respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in appeal 6. Heard both the sides. 7. As the said issue came up before this Tribunal in the assessee own case for the earlier period wherein vide Final Order No.A/51939/2015- EX(DB) dated 18.05.2015, wherein this Tribunal observed as under: 6. The appellant sell the two wheelers and their spare parts to their dealers all over India under an all India price list. In terms of the appellant's agreement with their dealers, every dealer shall vigorously promote, develop and maintain sales of the products and parts to the satisfaction of and in the manner required by the appellant and the dealer shall place firm orders for such products and parts as per the sales targets and will give estimates for the forward requirements for su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have also benefited the dealers, the amount being recovered by the appellant from the dealers cannot be said to be for the reason of or in connection with the sale of goods, as this amount would be for the advertisement and publicity effort of the appellant which has benefited the dealer. Moreover, an identical issue was involved in the appellant's own case in the previous period declared vide Judgment reported in 1998 (100) ELT 468 (Tribunal), in the para 3 of the Judgment of which the Tribunal has held that the advertisement expenses incurred by the appellant would not be includible in the assessable includible in the assessable value to the extent, the same were recovered from the dealers, as when the dealer is not in the picture an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as contribution wholly or exclusively to the marketability of the product but where there is a dealer in the picture and the advertisement helps the dealer apart from helping the product of the manufacturer the matter has to be looked at from a slightly different angle. Our attention has been invited to a decision of the Tribunal in Racold Appliances Vs. COCE (1994 (69) ELT 312) . Under an agreement between the manufacturer and the dealers, the dealers were to spend upto 2% of the total purchases for advertisement and 1.5% was to be returned by the dealers to manufacture and the dealers were to bear 0.5%. The department took the stand that this amount of 0.5% should be added to the assessable value. The Tribunal did not accept this view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. 7. Moreover, in terms of the judgments of the Apex Court in the case of CCE Baroda Vs. Besta Cosmetics Limited (supra) CCE- Surat Vs. Surat Textiles Mills Ltd. (Supra) cited by the ld. DR, the advertisement expenses incurred by the dealer would be includible in the assessable value of the goods only when the assessee manufacture has an enforceable legal right in respect of the dealers making it obligatory for the dealers to incur certain specified quantum of expense on the advertisement and publicity of the appellants product. The clauses of requiring the dealers to vigorously promote, develop and maintain sales of the product and parts to the satisfaction of and in the manner required by the appellant cannot be treated as th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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