TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal excludes dealer advertisement charges from Motor Car value in landmark decision</h1> <h3>Commissioner of Central Excise & Customs, Aurangabad Versus M/s. Skoda Auto India Pvt. Ltd.</h3> The Tribunal ruled in favor of the respondent, holding that the advertisement charges incurred by the dealers should not be included in the value of Motor ... Valuation - inclusion of cost of advertisement incurred by the dealers in assessable value - Circular No. 643/34/2002-CX dated 1.7.2002 and Circular No. 681/72/2002-CX dated 12.12.2002 - HELD THAT:- The learned Commissioner after analyzing the Letter of Intent/dealership agreement came to the conclusion that it does not contain any enforcing provision by which it could be construed that such advertisement cost is includible in the assessable value of the motor vehicles sold to the dealers much earlier in view of the principles laid down by the PHILIPS INDIA LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, PUNE [1997 (2) TMI 120 - SUPREME COURT]. On perusal of the Letter of Intent/agreement placed on record by the respondent it is found that a plain reading of the various clauses of the said agreement does not lead to an inference that the same provides an enforceable right to the respondent in relation to advertisement and sales promotion by the dealers. Further, the Hon'ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, MYSORE VERSUS M/S TVS MOTORS COMPANY LTD. [2015 (12) TMI 874 - SUPREME COURT] while considering the includibility of pre-delivery inspection charges and after sales service charges interpreting the expression “any amount that buyer is liable to pay to”, “by reason of” or “in connection with the sale” mentioned in the definition of ‘transaction value’, observed that such charges cannot be includible in the transaction value of the goods. Applying the principles laid down in the aforesaid judgments to the present issue of includibility of the cost of advertisement and sales promotion activity carried out by the dealers, after sale of the motor cars, this Tribunal in FORD INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-III [2017 (5) TMI 1388 - CESTAT CHENNAI], reached at the conclusion that the cost of the advertisement incurred by the dealers cannot be added to the transaction value - No contrary judgment has been placed by the Revenue. Appeal dismissed - decided against Revenue. Issues involved:Whether the advertisement charges incurred by the dealers should be included in the value of Motor Cars.Detailed Analysis:Issue 1: Advertisement charges inclusion in the value of Motor CarsThe case involved an appeal by the Revenue against an Order-in-Original passed by the Commissioner of Central Excise regarding the inclusion of advertisement costs incurred by dealers in the assessable value of motor vehicles. The Revenue contended that the advertisement costs should be included based on circulars issued by the Board. They argued that the principles laid down in certain judgments were not applicable to the case. On the other hand, the respondent argued that the Letter of Intent/agreement did not provide an enforceable right to the manufacturer for recovery of advertisement costs from dealers. They cited precedents and the absence of a clause enforcing such costs in the agreement. The Tribunal analyzed the agreement and found no provision for including advertisement costs in the assessable value of motor vehicles. They referred to judgments by the Hon'ble Supreme Court and the Tribunal in similar cases, emphasizing that additional charges incurred after the sale of goods are not includible in the transaction value. The Tribunal also considered circulars issued by the Board and previous judgments, ultimately concluding that the advertisement costs incurred by dealers cannot be added to the transaction value. As no contrary judgment was presented by the Revenue, the Tribunal upheld the impugned order and dismissed the Revenue's appeal.In conclusion, the Tribunal ruled in favor of the respondent, stating that the advertisement charges incurred by the dealers should not be included in the value of Motor Cars, based on the absence of an enforceable provision in the agreement and in line with established legal principles and precedents.
TaxTMI 
TaxTMI 
