Distributor-funded advertisement costs may count as additional consideration, but they do not by themselves create related-person status.

Advertisement and publicity expenditure borne by distributors can form additional consideration for valuation where the distributorship agreement requires such spending, and its money value must be included in assessable value; however, that fact alone does not establish mutuality of interest or make the distributors related persons. Separately, a duty demand not covered by invocation of the extended period is confined to the normal six-month limitation period, and the balance demand is time-barred. The valuation was to be recomputed by including the distributor-funded publicity expenditure, while related-person status was rejected and the demand remained restricted to six months before the notice.

---

---

Issues: (i) Whether the duty demand was barred by limitation beyond six months from the notice. (ii) Whether the distributors could be treated as related persons and whether the expenses incurred by them on advertisement and publicity formed additional consideration affecting assessable value and exemption eligibility.

Issue (i): Whether the duty demand was barred by limitation beyond six months from the notice.

Analysis: The demand covered a period substantially beyond six months before the show cause notice, and the extended period was not invoked in the notice. The plea of limitation, though raised for the first time, was considered in the interests of justice.

Conclusion: The demand was confined to the six months preceding the show cause notice and was barred for the remaining period.

Issue (ii): Whether the distributors could be treated as related persons and whether the expenses incurred by them on advertisement and publicity formed additional consideration affecting assessable value and exemption eligibility.

Analysis: The requirement in the distributorship agreement to incur advertisement expenditure could justify treating those expenses as additional consideration flowing to the manufacturer for valuation purposes. However, that circumstance by itself was insufficient to establish mutuality of interest or to make the distributors related persons. Since the distributors were compelled to spend on advertisement and publicity, the exemption based on invoice value was not available, and the assessable value had to include the money value of such additional consideration under the valuation rules.

Conclusion: The finding that the distributors were related persons was set aside, but the advertisement and publicity expenses were includible in assessable value and the exemption was denied.

Final Conclusion: The appeal succeeded only in part: the valuation was to be recomputed by adding the value of the distributors' advertisement and publicity expenditure, while the demand stood restricted to the six months before the notice.

Ratio Decidendi: Advertisement or publicity expenditure borne by distributors may constitute additional consideration for valuation, but it does not by itself establish that the distributors are related persons; a duty demand without invocation of the extended period is confined to the normal limitation period.

---