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TMI Blog2018 (12) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... h dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- Statement of relevant facts having a bearing on the question on which advance ruling is required. 1. Lear Automotive India Pvt. Ltd. (hereinafter referred to as Applicant) is having its office at E-25,26 & 27, MIDC Bhosari, Pimpri-Chinchwad, Maharashtra - 411 026 and also having various regional offices located at various other places in India. The Applicant is engaged in the manufacture of automotive seats', which is manufactured in its various plants located in the state of Maharashtra. 2. The present application is filed in respect of valuation of supply of automotive parts (hereinafter referred to as "final goods"), which are manufactured out of tools provided by the customers on Free of Cost (FOC) basis to manufacture the products as per their requirem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the same, the Applicant was amortizing the value of such tools supplied/ provided by the customers on FOC basis and was including the Same in the assessable value of the final goods for discharging applicable Central Excise Duty. 10. However, w.e.f. 1st July 2017, Central Goods and Service Tax Act, 2017 (hereinafter referred to as "CGST Act") has replaced the erstwhile Central Excise Regulations and does not include any pari-materia provision, similar to Rule 6 of Central Excise Valuation Rules, 2000. 11. Under the aforesaid circumstances, the Applicant seeks the present advance ruling to understand whether the amortized value of the tool cost needs to be added to the value of the final goods supplied to the customers under the GST laws. Statement containing applicant's interpretation of law and/or facts, as the case may be, in respect of question(s) on which advance ruling is required. 2. Question requiring advance ruling. 2.1. This advance ruling is sought to ascertain whether the amortized value of the tool cost which are provided/ supplied on FOC basis by the customer needs to be added to the value of the final goods supplied to the customers under the GST laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable by the recipient) provided the supplier and recipient are unrelated parties and price is the sole consideration for the supply. 3.7. Further, Section 15(2)(b) specifically states that where any amount which the supplier is liable to pay in relation to a supply but the same is incurred by the recipient on behalf of supplier, then such value is required to be included in the transaction value. 3.8. To determine whether in the present case, value of taxable supply paid by recipient to the supplier is the 'sole consideration, it is necessary to refer to the definition of the term 'consideration. 3.9. In this regard, the term 'consideration has been defined under Section 2(31) of the CGST Act, to mean any payment (in money or otherwise) or monetary value of any act or forbearance which is made in respect of, in response to or for the inducement of supply. Such consideration can flow from the recipient of supply or any other person and it could be either monetary or non-monetary consideration. Further to the above, the supply and the payment of consideration thereof must have reciprocity with each other. In other words, the term 'consideration' means a reasonable equivalent or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made thereunder to make such inclusion in the value as it existed under the erstwhile Central Excise Regulations. Unless there exists a specific provision for inclusion of free of cost supplies received from the buyer of the goods or to add the amortized value of the tool or dies provided by the receiver of the goods on FOC basis, such an addition cannot be made to the value of the taxable supply. 3.15. Reliance in this regard is placed upon the judgment of Hon'ble Supreme Court in the case of Moriroku UT India (P) Ltd vs State of U.P. [2008 (224) ELT 365 (SC)] = 2008 (3) TMI 513 - SUPREME COURT OF INDIA, wherein the Hon'ble Supreme Court in the context of UP Sales Tax held that the price of moulds manufactured by customer so that the vendor could use the same in manufacture of final components as per the specifications of the customer, would not be includible in the assessable value of the final components sold by the vendor to the customer as the cost of the same has been incurred by the customer and not the vendor. The Hon'ble Apex Court further held that the amortization cost calculated in terms of Rule 6 of Central Excise Rules cannot be included for the purposes of taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Rules, 2000 creates the deeming fiction only for the purposes of Section 4(1)(b) of the 1944 Act and for laying down the measure for levy of excise duty. It provides for items which constitute additional consideration. There is no such provision in Section 3 of the 1948 Act. Therefore, one cannot borrow and automatically apply the concept of amortised cost to Section 3 of the 1948 Act. 20. Before concluding, it may be clarified, that, in the present case, moulds were manufactured by the buyer/customer so that the auto components could be manufactured by the appellant in terms of the specifications given by the buyer. Therefore, the cost of manufacture of these moulds was incurred by the buyer/customer and not by the appellant. In our judgment, we have termed the "amortisation cost" as notional in the sense that it is not the cost in the hands of the appellant. As stated above, Rule 6 of Excise Valuation Rules, 2000 refers to items of additional consideration. But for Rule 6 it was not possible for the Department under the 1944 Act to load such items to the transaction value of the final product. It is for above reasons, particularly because cost of manufacture is not incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price is the sole consideration for the supply" ..... Emphasis supplied A.2 A close reading of the afore-stated provision provides that the value of supply is the price which is actually paid or payable for the supply of goods or services or both between two non-related persons. Further, such price paid or payable should be the sole consideration for the value of supply. In the present fact scenario, the Applicant and its customers agree to a certain price before placing the purchase order on the Applicant and such price is the only consideration that the Applicant is entitled to receive for the goods supplied by it. A.3 Further Section 15(2) of the CGST Act enlists the things which are to be included while calculating the value of supply, These are provided as under "(2) The value of supply shall include a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; b) any amount that the supplier is liable to pay in relation to such su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the way of providing the funds for tools or providing the tools itself. A.7 In this regard, the Applicant also places reliance upon the purchase order raised by the one of the Applicant's customer i.e. Mahindra & Mahindra (attached herewith as Annexure-2) wherein para 16 of the terms & conditions of the purchase order reads as under: "Any raw material or components, if given to you as vendor aid on "no charge basis" to enable you to execute this order/contract/scheduling agreement will remain our property without any title in your favour. You will not hypothecate such material with any bank or agency. The cost of material spoilt by you over and above the permissible wastage allowed by us will be debited to you. In the event of rejection due to defective castings, forging or partly processed material given by us we will pay you for the actual operations carried out by you on defective material after taking into account identical reciprocal percentage allowance towards defective material supplied by us as the permissible wastage allowance given to you a quarterly statement, showing material issued to you and supplies made by you MUST be submitted to us in duplicate." ....Emphasis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis shall not be added to the value of such supply because the cost of moulds/dies was not to be incurred by the component manufacturer and thus, does not merit inclusion in the value of supply in terms of section 15(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act for short). 1.3 However, if the contract between OEM and component manufacturer was for supply of components made by using the moulds/dies belonging to the component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis, the amortised cost of such moulds/dies shall be added to the value of the components. In such cases, the OEM will be required to reverse the credit availed on such moulds/ dies, as the same will not be considered to be provided by OEM to the component manufacturer in the course or furtherance of the former's business. A.11 Thus, the circular refers to the situation where the recipient gives moulds, jigs etc. on free of cost basis to the supplier who uses such moulds, jigs etc. to manufacture and supply the finished goods to the recipient of supply does not constitute a supply under GST since no consideration is charged by the recipient for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse. The Applicant submits that the present transaction of customer providing the tools FOC is an industry vide practice. Goods manufactured in the auto sector are customised items as each car model has different design and features. Therefore, the tools required to manufacture such goods are provided by the customer itself to suit their own needs and specifications. The customers also intend to retain the ownership of the tools so as to be able to use the tools for future manufacturing and hence they take the responsibility of providing the tools to the Applicant. In case where the contract between the Applicant and its customer does not expressly state the responsibility, it should very well be understood under the common business standards which indicate that the customer would always take up the responsibility of bearing the cost of the tools and not the Applicant. A.16 Further in the case of United India Insurance Company Ltd. v. Manubhai Dharmasinhbhai Gajera and Ors., reported at AIR 2009 SC 461 = 2008 (5) TMI 686 - SUPREME COURT citing the case of Shirlaw v. Southern Foundries (1926) Ltd. [1939] 2 K.B. 206, it was observed as under: "Prima facie that which in any contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, it is very clearly established that the legislature only intends to include such amounts which are to be borne or agreed to be borne by the supplier and therefore form a part of the consideration to be received by the supplier. The legislature clearly does not want to include the FOC supply of goods in the value of the supply. A.20 In this regard reliance is placed upon Maxwell on Interpretation of Statutes (12th Edn.) at para 33 which provides as under: "Omissions not to be inferred-It is a corollary to the general rule of literal construction that nothing is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the legislature intended something which it omitted to express. Lord Mersey said: 'It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do.' 'We are not entitled,' said Lords Loreburn L.C., 'to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself.' A case not provided for in a statute is not to be dealt with merely because there seems no good reason why it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertinent to note here that the erstwhile sales tax regime was also a value added tax regime similar to the present GST law. In fact, under the erstwhile sales tax regime, the states denoted the tax levied by them as VAT in light of the nature of such tax. Similarly, GST is also a value added tax and has been modelled on the VAT based regime. The idea of GST was first mooted by the Kelkar Task Force in 2003 which suggested the introduction of GST on the principles of VAT. Therefore, the erstwhile sales tax regime and the present GST regime being founded on similar principles, Supreme Court decision passed in respect of the sales tax laws is directly applicable to the facts of the present application. A.27 The Applicant in this regard places reliance upon the case of Moriroku UT India (P) Ltd. v. State Of U.P reported at 2008 (224) ELT 365 = 2008 (3) TMI 513 - SUPREME COURT OF INDIA wherein the Supreme Court in context of UP Sales Tax had held that, price of moulds manufactured by customer so that vendor could use the same in manufacture of final components as per the specifications of the customer, would not be includible in the assessable value of the final components sold by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nactment to enactment; therefore, the regime under Central Excise, 1944 cannot be applied identically in the UP Trade Tax, 1948. A.30 It was further held that the UP Trade Tax, 1948 is a self-contained code for levy of tax on the sale or purchase of goods in Uttar Pradesh. It is leviable on the act of sale, whether actual or deemed for a consideration. On the other hand, excise duty is leviable on the event of manufacture and it is calculated on the value of manufactured goods. Further excise duty is independent of ownership. However, for sales tax what is to be taken into consideration is the consideration for transfer of property from seller to buyer and thus manufacture is irrelevant. As a result, goods supplied free of cost though included in the Excise law regime could not be identically included in the sales tax regime provided the differences between both the forms of taxation. The relevant portion of the above-referred case has already been relied upon by the Applicant in its application and the same is not being repeated here for the sake of brevity. A.31 Further, owing to the difference in the excise law under the previous regime and the existing GST regime, the positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er." B.3 Therefore, it is submitted that the value of goods provided free of cost by the customer to the supplier is not required to be factorized or amortized in the value of supply. B.4 Further reference is also made to Para 90 of Australian GST Ruling 2001/6 (hereinafter referred to as "GSTR 2001/6") which provides that the recipient of a supply may provide or make a thing available for the supplier to use in making the supply. However, the thing does not necessarily form consideration. The example provided in GSTR 2001/6 is reproduced below. "Things used in making a supply Eddie Engineer ('Eddie') agrees to supply services to Mountain Miners ('Mountain') at a rate of $100 per hour. Under the agreement, Eddie must perform the services on Mountain's premises in Melbourne. Mountain agrees to allow Eddie to use its computer facilities, stationery and safety equipment on Mountain's premises to perform the services. Mountain also agrees to fly Eddie to Melbourne and provide accommodation and meals during the period Eddie performs the services. There is monetary consideration for Eddie's services ($100 per hour). The provision of the use of computer fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have to use its own premises and equipment. The use of the premises and equipment is not consideration for Fast's supply as there is no nexus between it and the supply by Fast. It does not have an independent identity such that it provides Fast with any value in return for its services. dependent goods Pretty Paint agrees to paint the interior of Peng's offices for $10,000. Peng agrees to provide Pretty Paint with 1,000 cans of pink shimmer paint that Pretty Paint has advised will be enough to paint the offices. The paint provided by Peng is not consideration for Pretty Paint's supply. Pretty Paint's supply is the service of painting the offices. Although Pretty Paint would have charged more money if it had to also supply the paint, this is not relevant in this particular transaction." B.5 The Australian GST regime does not envisage that goods and/or services made available by the recipient and consumed by the supplier for making a supply to the said recipient would amount to non-monetary consideration, based on the direct nexus test. B.6 The tools that are supplied by the customer hold no value in the hands of the Applicant other than using the same for manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the seats for the respective customer. In the absence of any value addition to the tools, if the value of the tools are further included in the value of the final supply of goods it would amount to double taxation in so far as the tools would have already suffered tax once. C.4 The Applicant has already explained in the aforesaid paras that the GST law is a value added tax regime and tax is levied only on value addition thereby removing the cascading effect of taxes. Provided the present factual scenario, if the cost of goods provided on FOC basis is included in the value of supply it would lead to a cascading effect, thereby the defeating the objective of the GST legislation. C.5 In light of the above, it is submitted that the value of tools is not includable in the value of the supply as determined under the GST law. Further Additional Submissions made by applicant on 07.08.2018. 1. Lear Automotive India Pvt. Ltd. (hereinafter referred to as 'Applicant') has filed an application before this Hon'ble Authority on 03.05.2018. The Applicant in this regard was granted an opportunity of personal hearing on 28.06.2018 wherein the Applicant through its authorized representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant) (attached herewith as Annexure-1) entered into between the Applicant and its customer. B.2 In light of the discussion regarding the above-referred agreement, the Applicant wishes to further explain the transaction in detail to support its contention. Business transaction taking place in the present matter B.3 The Applicant humbly submits that the seats developed, manufactured and sold by the Applicant are highly customized products since every seat model that is produced by the Applicant is made as per the individual demands and requirements of the particular customer. The business practice adopted by the Applicant is totally reliant on the customer's needs as the products i.e. the seats/ seating systems have to be manufactured as per the specifications provided by the customer. The Applicant undertakes the design, development and the manufacture process of such seats at its own manufacturing facilities. Since the seats and other related products manufactured by the Applicant are highly customized, the Applicant procures certain tools, moulds, dies, fixtures, jigs etc. which are required for manufacturing the desired products. B.4 This being a highly customized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the same is consequently included in the cost of the manufactured products. B.9 It is therefore submitted that in all the cases the obligation to provide tool is on the receiver of the supply and wherever it is an obligation on the Applicant to bear the tool cost (i.e. tool meant for manufacturing generic products and not specific products- as stated above), the value of the same has already been adjusted while calculating the sale price Of the component so manufactured by the Applicant. Once it is established that the Applicant had no obligation to use its own tool then the question of adding the amortized value of the tool supplied by the receiver of the supply of FOC basis does not arise. B.10 In any case, on the cost of repetition, it is submitted that the tool so procured by the Applicant and sold to M&M has already attracted applicable taxes and hence any proposal to add the amortized value of the tool would amount to double taxation which is purely against the spirit of the GST Legislation. C. Response to Query 2. Clarifications with respect to the ownership of the tools in light of the Circular No. 47/21/2018-GST dated 08.06.2018 issued by the CBIC C.1 In order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mer itself and the same are not in the scope of supply of the Applicant. C.6 It is submitted that wherever the tools are supplied by M&M i.e. the customer itself to the Applicant, it is undisputed that the tools are owned by the customer and the same are provided to the Applicant for the sole purpose of use in the manufacture of goods to be supplied to the said customer. Further, as soon as the production process is completed the tools are returned to the customer. In this regard, the Applicant humbly submits that wherever the customer itself has supplied the tools to the Applicant, there is no question of including the value of the said tools in the value of the supply as under Section 15(2) of the CSGT Act. C.7 It is further submitted that in most of the cases, the Applicant gets the tool developed from the third party by involving its engineers and upon receipt of the tool and also ensuring that the tool is capable to manufacture the desired products, the same is sold to the OEM which is M&M in the present case. However, the physical possession of the tools remain with the Applicant as the tools are to be used in the manufacturing process. C.8 Thus, it is conclusive from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ....Emphasis Supplied C.10 The above-referred terms & conditions in the purchase order clearly demonstrate that the any tools if procured by the Applicant in light of the tooling agreement would be the property of M&M and the said tools can only be sold to M&M. This very fact is evidence enough that even in case wherein the customer does not provide his own tools. the tools procured from outside or developed by Applicant are the property of the customer only and this has been agreed well in advance. It is not the case that it was the responsibility of the Applicant to bring its own tool and the same has been brought by the receiver of the supply. C.11 Reliance in this regard is also placed upon the Chartered engineer's certificate dated 06.04.2016 wherein it has been categorically stated that the tools procured/ developed vide the above-referred Purchase order No. A003/A6X/3200094768 are being used by the Applicant and are the property of M&M. A copy of the certificate dated 06.04.2016 is attached herewith as Annexure-7. C.12 From the above discussion, it is conclusive that when the tools are to be procured/developed by the Applicant the ownership is transferred and thus it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )] = 1988 (10) TMI 106 - SUPREME COURT OF INDIA. In the above-mentioned case, the appellant company was a building contractor and a registered dealer under Madhya Pradesh General Sales Tax Act. The appellant company's tender, being an item rate tender, was accepted by CPWD for construction of godown and ancillary buildings. The tender so submitted included the prices of materials such as iron, steel and cement. However, PWD had agreed to supply these materials for construction and deduct their prices from the final bill of the appellant. As per Clause 10 of the Contract, all the materials supplied to the contractor remained the Government's property. C.16 The issue presented before the Hon'ble Supreme Court in light of the above facts was that whether there was a sale when the construction materials were supplied by PWD and whether the property in goods passed to the appellant company or it continued to remain with PWD despite the fact that they have debited the cost of the construction supplied from the final bill. C.17 The Hon'ble Supreme Court upon a careful perusal of the facts and the relevant case law had held that in order for a transaction to be a taxable sale, mere passi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no transaction handled by the Applicant wherein it uses its own tool (except the generic tools which are insignificant in the transaction and generally the said tools belong to the Applicant only and value of the said tool is inbuilt in the price charged from the customer), therefore it is not possible for the Applicant to provide any such comparison. D.3 It is therefore submitted that price charged to the customer for the finished products is not altered whether the tools are provided by the customer or procured by the Applicant and charged to the customer as in both the cases the property in the tool belongs to the customer only and the same is agreed well in advance as per the Industry norms. 03. CONTENTION - AS PER THE DEPARTMENTAL CONCERNED OFFICER-- 2. M/s. Lear Automotive India Pvt. Ltd, has applied for Advance Ruling in proforma GST ARA 01 and this office has been directed to represent the case along with relevant record on 20.06.2018 at 1100 am. Subsequently, an e-mail has been received from Advance Ruling Authority on 06.06.2018 conveying re-scheduling of the hearing in the case on 27.06.2018 at 0200 pm. 3. In this connection, the point-wise reply on the said matter i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added in value of finished goods." 04. HEARING The Preliminary hearing in the matter was held on 27.06.2018, Sh. Sandeep Sachdeva, Advocate along with Sh. Arpit Chaturvedi, Advocate and Sh. Chaitanya Bhatt, C.A., duly authorized appeared and made contentions as per their ARA. Jurisdictional Officer Sh. AX. Jadhav, Suptt. Pune I Commissionerate appeared and stated that they have made written submissions. The final hearing was held on 18.07.2018, Sh. Sandeep Sachdeva, Advocate along with Sh, Arpit Chaturvedi, Advocate and Sh. Sanjay Bhalerao, Manager, Indirect Taxes appeared and made contentions as per their written submissions and application. It was requested to the applicant to clarify with documentary evidence as to who developed and manufactured the tools as given in Annexure-I for which payment is made by M & M as per agreement No. MOS/MM/F/16- Rev 02.01.08.2015 Dt.10th Feb, 2016. They were also requested to give detailed agreement dated 26th May, 2015 (LOBA date) for Bolero Sheets comfort improvement. They were also requested to give copies of agreement for manufacture of components wherein they provide their own tool to the vendor with relevant documentary evidence along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The invoice raised by the Applicant in customers name for the sale of the said tools. On the basis of above, the issue to be decided in present proceeding is whether the goods which are claimed to be supplied free of cost (FOC) would form part of value of taxable supply. It is the case of applicant that the tools that are provided by the customer on FOC would not be included in the value of supply. It is worth here to mention that several representations were received by CBEC seeking clarification on issue such as 'whether moulds and dies owned by Original equipment manufacturer (OEM) that are sent free of cost (FOC) to a component manufacturer is leviable to tax and Whether OEMs are required to reverse input tax credit in this case? The issue was examined by CBEC and a clarification vide circular No. 47/21/2018-GAT dated 08/06/2018 has been issued in the matter. The relevant para is reproduced as below:- Sl.No. Issue Clarification 1 Whether moulds and dies owned by Original Equipment Manufacturers (OEM) that are sent free of cost (FOC) to a component manufacturer is leviable to tax and whether OEMs are required to reverse input tax credit in this case? 1.1 Moulds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and the customer of the applicant. Once it is established that the obligation to provide tools on FOC basis is on the customer then the question of adding the amortised value of tools supplied by the customer does not arise. However, the situation is reverse where the obligation to use tools is on the applicant but provision for the same is made by the OEM on FOC basis. In view of this, we now examine the relevant clauses of the agreement made between applicant and Mahindra and Mahindra Ltd. on 10th February, 2016 (which is made pursuant to agreement dated 26th May 2015 (LOBA Date) for Bolero Comfort Improvement agreement to purchase components.) The relevant clauses of the agreement dated 10th February, 2016 are as under:- 1. Provision of Equipment Mahindra and Mahindra Ltd hereby agrees to (pay the Toolcost for development and manufacturer of toolings/ give the vendor its own (Dies, tools, jigs, fixtures, SPMs, etc.) more particularly described in Annexure I attached hereto (herein referred to as the "Equipment"), for use by the Vendor, immediately upon the execution of this Agreement and the Vendor hereby agrees to use the money for the Equipment for the said use." 2. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generally give effectual receipt and discharge and act for and on behalf of M&M for the benefit and in trust for M&M may direct, from time to time. b) Notwithstanding anything contained in sub-section (a) hereinabove, M&M may, at its sole option, decide to apply the claim amount received from the insurance company in making good the damage. However, in the event of irreparable loss of damage to the Equipment, M&M shall be entitled to terminate this Agreement, repossess the Equipment in any state as it may be, to retain the claim amount for such Equipment, and receive the shortfall on demand from the Vendor to make good the total quantum of damage to the Equipment less the amounts received by M&M from its insurance protection for the Equipment. 4. Non-Encumbrance a) The Vendor shall not transfer or otherwise dispose of or purport to transfer or dispose of the Equipment or its rights or obligations or interest hereunder, by way of mortgage, charge, lien, sub-lease, sale, hypothecation, pledge, license or otherwise in any manner encumber or part with the possession on the Equipment or on any part thereof. b) The Vendor shall in any event ensure by giving such notice to any t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative of the other party for any purpose. Neither party has any right or authority to accept any service of process or to receive any notices on behalf of the other party or to enter into any commitments ,undertaking, or agreements purporting to obligate such other party in any way, or to amend, modify or vary any existing agreements to which such other party may be a party. From the scrutiny of the terms of the agreement we clearly see that the customer is liable to pay applicant the tool cost for development and manufacture of tooling. Accordingly applicant undertakes the design, development of tools. Applicant has categorically submitted that in most of the cases applicant gets the tool developed from the third party by involving its engineer. On receipt of the product from the third party same is sold to the OEM which is M&M in the present case. Further from the perusal of purchase order raised by Mahindra and Mahindra and also another customer M/S. General Motors on the applicant and the corresponding invoices it is seen that the tools so procured by the applicant are supplied to customer like M&M and GM for which tax invoices are raised in respect of said supply of tools ..... X X X X Extracts X X X X X X X X Extracts X X X X
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