TaxTMI 
TaxTMI 
2011 (7) TMI 906
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.... (VDIL in short), Tarapur, are manufacturers of ice cream/ice candy falling under Chapter Heading No.21.05 of the Central Excise Tariff. They entered into an agreement dated 31.3.1997 with M/s. Vadilal Milk Products Ltd. (VMPL in short) for sale of marketing rights of ice cream/ice candy and all other products bearing the brand name 'VADILAL' in the States of Maharashtra, Karnataka, Goa, Andhra Pradesh and Kerala for a period of five years for a consideration of Rs.180 lakhs. As per the said agreement, M/s. VMPL were required to undertake advertisement and publicity of ice creams of VADILAL brand and also to incur marketing, selling and organization expenses. The department was of the view that M/s. VDIL, while clearing the goods to M/s. VM....
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....nt were continuing even when M/s. VMPL were given the marketing rights. On account of the grant of marketing rights and incurring advertisement and publicity expenses and selling expenses, there should be a flow back of money from M/s. VMPL to M/s. VDIL so that the assessable value of the products sold can be revised upwards so as to include these elements in the assessable value. The agreement and the expenses incurred by M/s. VMPL have not affected the price of the products sold and the grant of marketing rights to M/s. VMPL was only a legitimate business consideration. He further argued that sale of marketing rights entailed no extra benefits to the appellant and the appellant was delivered at the same price as already decided by them. H....
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....sold by the manufacturer to the dealer. 3.4 The Advocate further argued that a copy of the agreement dated 31.3.1997 was given to the department as early as 16.2.1998. Further, there was a series of correspondence between the department and the appellant during 1999 and 2000 vide letter dated 18.5.1999, 31.7.2000 and 11.7.2001 issued by the Superintendent of Central Excise to the appellant. The appellant had replied to these letters clarifying the position vide their letters dated 28.1.2000, 25.8.2000, 23.7.2001 and 11.2.2002. The department was thus all along aware of the existence of the agreement between VDIL and VMPL for sale of marketing rights. In spite of this knowledge on the nature of the transactions inv....
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....licence fee for grant of marketing rights cannot form part of the normal price. Similar view was held by this Tribunal in the case of Kwality Ice Cream Co. vs. CCE, Chandigarh 2002 (145) ELT 583 (Tri.-Del.). With regard to the time bar issue, they relied on the judgment of the Hon'ble apex court in Padmini Products vs. CCE 1989 (43) ELT 195 (SC) and Tamil Nadu Housing Board vs. CCE, Madras 1994 (74) ELT 9 (SC). 4. The learned SDR appearing for the department reiterated the findings given by the adjudicating authority. He submitted that the marketing rights were granted to M/s. VMPL by M/s. VDIL for a consideration of Rs.180 lakhs for a period of five years. This amount received by the manufacturer is a relevant consideration ....
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....goods are sold to the consumer and therefore, they should form part of the assessable value of the goods in question. The learned DR relies on the following judgments, namely CCE, Aurangabad vs. Bajaj Auto Ltd. 2010 (260) ELT 17 (SC) and CCE, Surat vs. Neminath Fabrics Pvt. Ltd. 2010 (256) ELT 369 (Guj.) in support of the contention that the extended period of time has been rightly invoked in the case as the appellant had not disclosed all the facts to the department and had deliberately suppressed the facts relating to the transaction from the department and therefore he contends that the demands have been rightly made by invoking the extended period of time and therefore, the order of the learned adjudicating authority has to ....
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....st effective from 1.3.1994 wherein they had declared that the goods are manufactured by the appellant but are marketed by M/s. Vadilal Milk Products Ltd. and the goods are bearing the brand name 'VADILAL'. Similarly in the classification list effective from 16.3.1995 also the fact that the goods are manufactured by them but are marketed by VMPL was made known to the department. Again in the classification declaration effective from 28.2.1997 the above information was declared to the department. Thus right from 1994 onwards, the department was fully aware that the goods manufactured by them was marketed by VMPL and a copy of the agreement dated 31.3.1997 between VMPL and VDIL was also made available to the department as early as Februa....