Advertisement charges for brand owner's own goods are not part of the manufacturer's assessable value in job work arrangements.

Advertisement and publicity charges incurred by a brand owner for its own branded goods, when goods are manufactured on job work basis and the expenditure is not incurred on behalf of the manufacturer, are not includible in the manufacturer's assessable value for central excise. On that footing, such charges cannot be treated as additional consideration payable by the buyer on behalf of the assessee, and the related duty demand, penalty, and interest fail.

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Issues: Whether advertisement and publicity charges incurred by the brand owner for goods manufactured on job work basis were includible in the assessable value for central excise duty.

Analysis: The arrangement showed that the goods were manufactured for the brand owners under agreed terms and bore their trade mark. The expenditure was incurred by the brand owners on promotion of their own branded goods, not on behalf of the manufacturer. In such a situation, the advertisement and publicity charges could not be added to the manufacturer's assessable value or treated as an amount payable by the buyer on behalf of the assessee.

Conclusion: The advertisement and publicity charges were not includible in the assessable value, and the duty demand, penalty, and interest based on such inclusion could not be sustained.

Ratio Decidendi: Advertisement and publicity expenditure incurred by a brand owner for its own goods, where the goods are manufactured by another on job work basis and the expenditure is not incurred on behalf of the manufacturer, is not includible in the manufacturer's assessable value.

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