2007 (5) TMI 102

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....sactions between FIPL and its dealers are governed by 'Dealer Sales and Service Agreement' (the agreement).,The issue involved in this appeal is whether the expenditure incurred by dealers in promoting sales of assessee's products by advertising them in the print media, static display etc. is includible in the assessable value of cars. The sales promotion campaigns were undertaken by one or several dealers together or jointly by the dealers and financiers such as Ford Credit, HDFC Bank, ING Vysya etc. In most such cases, FIPL reimbursed the expenditure incurred by the dealers/financiers to varying extents such as 75%, 50%, 25% at their discretion. The Commissioner has demanded duty on that portion of the expenditure not reimbursed to the de....

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....elivery, 2. advertising, …………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………. 3. The ld. Counsel for the representative submitted that whatever expenditure was incurred by the assessee on advertising was included in the sale price to their dealers and that the dealers/financiers had advertised the cars for their own benefit. There was no written or oral agreement, requiring the dealers to advertise the cars. The finding of the Commissioner to the contrary was with out any basis. The assessee had never charged the deale....

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....anciers advertised the sale of cars to maximize their profit. Though FIPL reimbursed part of the advertisement expenditure incurred by the dealers on advertising, the assessee did not have any enforceable legal right against the dealers to require them to incur expenditure on advertisement. Therefore, the expenditure incurred by the dealers or financiers is not includible in the assessable value of the cars. In a case of similar facts, in CCE v. M/s. Gangadharam Appliances Ltd. reported in 2007-TIOL-372-- CESTAT-MAD, this Bench had held that for including advertisement costs in the assessable value, it should be shown that such cost was incurred by the customers compulsorily. In Amco Batteries Ltd. v. CCE, 2007 (207) E.L.T. 612 (Tri.-Bang.)....