Assessable value and advertisement cost apportionment; only attributable expenditure may be added, while extended limitation was justified.

Amounts recovered from bottlers for co-operative advertisement were not mechanically includible in the assessable value of concentrates where the advertising also benefited the buyers' aerated waters. Only the portion of expenditure actually attributable to enhancing the concentrates' marketability could be added, and that apportionment had to be made on relevant evidence. On limitation, non-disclosure of the second set of invoices showing recovery of advertisement charges supported suppression of the true value with intent to evade duty, so the extended limitation period under the proviso to Section 11A(1) was invocable. The matter required fresh adjudication after determining the attributable advertisement cost.

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Issues: (i) whether the amounts recovered from bottlers towards co-operative advertisement were includible in the assessable value of the concentrates; (ii) whether the extended period of limitation under the proviso to Section 11A(1) was invocable.

Issue (i): whether the amounts recovered from bottlers towards co-operative advertisement were includible in the assessable value of the concentrates.

Analysis: The advertisement scheme was not confined to the concentrates alone. It promoted the aerated waters manufactured by the buyers using the concentrates and also enhanced the marketability of the concentrates. At the same time, the same expenditure also benefited the buyers, who would ordinarily incur some advertising cost for their own product. The correct approach was therefore to determine, on the basis of relevant data from both sides, the portion of the advertisement cost actually referable to the enhanced marketability of the concentrates.

Conclusion: The entire advertisement expenditure could not be mechanically added to the assessable value. Only the appropriate attributable portion, if proved, was liable to be included, and the matter required fresh determination after apportionment.

Issue (ii): whether the extended period of limitation under the proviso to Section 11A(1) was invocable.

Analysis: Only one set of invoices was furnished to the department, while the second set showing recovery of advertisement charges was not disclosed. In the circumstances, the allegation of suppression of the true value with intent to evade duty was held to be probabilised, and the facts justified invocation of the extended limitation period.

Conclusion: The extended period of limitation was rightly invocable.

Final Conclusion: The findings on merits and limitation were sustained, but the order was set aside to the extent that it failed to undertake apportionment of the advertisement cost, and the matter was remanded for fresh adjudication after giving the assessee an opportunity to produce necessary data.

Ratio Decidendi: Where advertisement expenditure benefits both the manufacturer and the buyers, only the portion of the recovered cost referable to the assessable product's enhanced marketability can be added to assessable value, and the authority must determine that portion on relevant evidence before final adjudication.

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