TaxTMI 
TaxTMI 
1986 (11) TMI 179
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....lear that the appellants were a nonexclusive dealer in the area comprising Union of India including the States of Sikkim and Bhutan and M/s. General Motors reserved the right to sell TEREX Spare Parts to anybody else also in India. They cited the instance of M/s. Hindustan Motors who were importing TEREX parts directly from M/s. General Motors at the same invoice price. (2) The appellants were not an agent or local representative of General Motors. They purchased TEREX Spare Parts in the capacity of a principal on outright sale basis and on sale the property passed to the appellants. They relied on the Delhi High Court judgment in the case of M/s. Jay Engineering Works Ltd. [1981 - E.L.T. - 284 (Del.) = 1LR (1981) 1 Delhi 795]. (3) Import by others who had to pay 18% buying commission over and above the invoice price was only about 8%. The remaining 92% or so of the goods brought into India were imported by the appellants. Considering that the overwhelming quantity was imported by the appellants, it was their invoice price which was the value ordinarily charged. (4) General Motors invoiced the goods at the same prices to every one. The appellants, however, admitted that ot....
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.... that the appellants were an agent of M/s. General Motors. The Agreement required the appellants to aggressively develop the sales of TEREX products and parts in the whole of India including the States of Sikkim and Bhutan. The appellants had to advertise for the goods of M/s. General Motors at their own (appellant's) expense. They had to attend to the customer complaints to maintain the goodwill of the manufacturers, i.e. M/s. General Motors. In return, General Motors compensated the appellants by way of buying commission or overriding commission. Thus, argued the learned representative of the department, there was mutuality of interest between the two. The interest of M/s. General Motors was that they got aggressive development of their market in India and Bhutan. The appellants' interest was the 18% commission which they got from other importers. This happened because General Motors did not, in fact, deal with others in India. Every buyer in India and Bhutan had practically no option but to approach General Motors through the appellants and in the process the other buyer had to pay 18% more for importing the same goods into India. Relying on the Calcutta High Court judgment in t....
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....uch or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation or exportation, as the case may be, in the course of international ' trade, where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale or offer for sale : (Provided that such price shall be calculated with reference to the rate of exchange as in force on the date on which a bill of entry is presented under Sec. 46, or a shipping bill or bill of export, as the case may be, is presented under Section 50); (b) where such price is not ascertainable, the nearest ascertainable equivalent thereof determined in accordance with the rules made in this behalf." xxx xxx xxx xxx The issues that require determination by us are :- (a) Which was the price at which the goods were ordinarily sold or offered for sale - the one paid by the appellants or the one paid by other? (b) Was the price paid by the appellants the sole consideration for the sale? 5. The Agreement, no doubt, says that the appellants were a non-exclusive dealer and that they were not an agent or local representative of M/s. Ge....
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....ssion which other buyers of TEREX Spare Parts were, in fact, forced to pay to the appellants. In the facts and circumstances of the case, it cannot be said that the invoice price of the appellants was the sole consideration for the sale; in addition to this price, the appellants were to incur expenses on advertisement, publicity and market promotion of M/s. General Motors' products. The set up was such that a sort of mutuality of interest developed between M/s. General Motors and the appellants. The former got its market' promoted and developed in India and Bhutan without paying for it, the latter got the expenses back by way of the buying commission which all other buyers of Spare Parts were obliged to pay. It may be that no part of the buying Commission flowed back to M/s. General Motors in cash but the flow back in kind was certainly there. 7. There is no subsance in the appellants' argument that the buying commission was a post-importation charge. The actual position was that no other buyer could land TEREX Spare Parts at the time and place of importation without having to pay the 18% buying commission to the appellants. The buying commission was, therefore, a part and ....