2007 (7) TMI 561 - AT - Central Excise

Tribunal Waives Pre-Deposit, Accepts Trade Promotion Argument

The Tribunal granted waiver of pre-deposit and proceeded to hear the appeal itself for final disposal. The appellant's argument that the gifts were part ... Valuation Appellant, a manufacturer of PP medicaments, purchased promotional items in bulk which dealers distributed as gifts and for which the appellant recovered costs by issuing debit notes. Assistant Commissioner confirmed a demand of Rs. 63,588 with equal penalty under Section 11AC and interest under Section 11AB; Commissioner (Appeals) rejected the appeal but reduced penalty. Tribunal granted waiver of pre-deposit and adjudicated the appeal on merits. Finding that expenses were initially borne by the appellant but subsequently recovered from distributors and that 'no evidence has been shown that the promotional activities were taken at the instance of and for the exclusive benefit of the appellant,' the Tribunal adopted precedent excluding dealer-borne promotion costs from assessable value. Emphasizing that 'the advertisement sales promotion expenses incurred by dealers themselves cannot be a part of the assessable value,' the Tribunal allowed the appeal and disposed of the stay petition.