TMI Blog1997 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... course enhance in the eyes of intending purchasers the value of the appellant's product, but such enhancement of value enured not only for the benefit of the appellant; it also enured for the benefit of the dealer for, by reason thereof, the dealer got to sell more and earn a larger profit. The guarantee attached to the appellant's products specified that they could be repaired during the guarantee period by the appellant's dealers anywhere in the country. Thus, though one dealer might have to repair goods sold by another dealer and incur costs in that regard, he also had the benefit of having the goods he sold reparable throughout the country. The provision as to after sales service, therefore, benefited not only the appellant; it was a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arantee period, the Tribunal observed that there was nothing on record to show that the expenses incurred by the dealers on this account were reimbursed by the appellant and, upon this basis it said, Obviously, the dealer was to meet these expenses out of the discount offered by the manufacturer to him . In this behalf the Tribunal also quoted senior officers of the appellant who had said that the costs of such service were to come out of the dealers' discount. Insofar as advertisement expenses were concerned, the Tribunal laid emphasis on the fact that advertisement by the dealers was mandatory, and it had to be carried out at the dealers' own expense. It noted, however, that the advertisement cost was, in fact, shared between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wholesale dealer might ultimately have the parts replaced by it reimbursed from the manufacturer, the service facilities were provided by the wholesaler with a view to earn goodwill and attract customers. The advertising of a product by the wholesaler was one of the well-known methods by which the wholesaler attracted customers and if, as a result of increasing its business, the demand for the product of the manufacturer also increased, the advertising by the manufacturer could not be said to be for and on behalf of the manufacturer. 3. In Union of India v. Mahindra and Mahindra Ltd. - 1989 (43) E.L.T. 611, the High Court at Bombay emphasised the relationship between the parties, being of buyer and seller on principal to principal bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which the dealer shall sell the products. The dealer shall, however, be free to charge prices lower than those. (18) The Dealer undertakes strictly to comply with the terms of guarantee of free service for the company's products laid down by the Company from time to time regardless of where the purchase has been made and further undertakes that it shall not charge the customer for any repairs to any Philips receivers during the prescribed guaranteed service period. (19) The Dealer undertakes to maintain an efficient service station duly equipped in every respect to the satisfaction of the Company at all times and will assume full responsibility for the servicing or repairs in respect of the sets and the Company's products. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and earn a larger profit. The guarantee attached to the appellant's products specified that they could be repaired during the guarantee period by the appellant's dealers anywhere in the country. Thus, though one dealer might have to repair goods sold by another dealer and incur costs in that regard, he also had the benefit of having the goods he sold reparable throughout the country. The provision as to after sales service, therefore, benefited not only the appellant; it was a provision of mutual benefit to the appellant and the dealer. 7. We think that in adjudicating matters such as this, the Excise authorities would do well to keep in mind legitimate business considerations. 8. We cannot help but observe that the reduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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