TaxTMI 
TaxTMI 
1997 (2) TMI 120
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....uctions from the price realised from its dealers on account of, amongst others, "normal trade discount although a substantial part thereof represented advertisement expenses and expenses on after sales service which were includible in the assessable value. The demand in this behalf was upheld as representing 2% of the trade discount. The Tribunal was moved in appeal. It noted the terms of agreement entered into between the appellant and its dealers and dismissed the appeal. In regard to the service rendered by the dealers during the guarantee period, the Tribunal observed that there was nothing on record to show that the expenses incurred by the dealers on this account were reimbursed by the appellant and, upon this basis it said, "Obviousl....
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....sel for the appellant drew attention to the judgment of a Division Bench of the High Court at Madras in Standard Electric Appliances, Tuticorin v. Superintendent of Central Excise, Tirunelveli and Ors. - 1986 (23) E.L.T. 302. The court said that it was common knowledge that when a consumer purchased an article from a dealer, in the case of service facilities he looked to the dealer and not to the manufacturer. For replacement of defective parts also he looked to the dealer from whom he had purchased and, notwithstanding the fact that the wholesale dealer might ultimately have the parts replaced by it reimbursed from the manufacturer, the service facilities were provided by the wholesaler with a view to earn goodwill and attract customers. T....
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....'s products or levied on the said sales shall be borne by the Dealer and the Dealer shall indemnify and keep indemnified the Company against any claim, demands, proceedings, costs, charges and expenses in respect of such imposition, taxes and duties. (16) The Dealer will be informed from time to time of the Company's products which are available and of their current list prices together with the terms of supply and prices applicable to the dealer. The Company shall be at liberty to intimate to the dealer the maximum prices at which the dealer shall sell the products. The dealer shall, however, be free to charge prices lower than those. (18) The Dealer undertakes strictly to comply with the terms of guarantee of free service fo....
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....ch advertisement was borne half and half by the appellant and the dealer. Making a deduction out of the trade discount on this account was, therefore, uncalled for. 6. As to the after sales service that the dealer was required under the agreement to provide, it did of course enhance in the eyes of intending purchasers the value of the appellant's product, but such enhancement of value enured not only for the benefit of the appellant; it also enured for the benefit of the dealer for, by reason thereof, the dealer got to sell more and earn a larger profit. The guarantee attached to the appellant's products specified that they could be repaired during the guarantee period by the appellant's dealers anywhere in the country. Thus,....