LexCOLLECTOR OF CENTRAL EXCISE, PUNE versus M/S. BAJAJ TEMPO LTD.
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A B COLLECTOR OF CENTRAL E:'::CISE, PUNE v. MIS. BAJAJ TEMPO LTD. FEBRUARY 7, 2005 [S.N. VARIAVA, DR. AR. LAKSHMANAN AND S.H. KAPADIA, JJ.) Central Excise Act, 1944-Section I IA (/)-Reimbursement of advertisement expenses initially incurred by manufacturer from dealers- C Whether includible in the assessable value under extended period of limitation- Collector holding it to be includible-Tribunal applying certain decisions and without discussing evidence, setting aside the order-On appeal, held: Decisions applied by the Tribunal does not pertain to the mailer in issue and as such Tribunal wrongly applied the decisions-Hence, order of Tribunal and that of adjudicating authority set aside-Matter remitted back to Adjudicating D Authority for fresh decision-Precedent-Wrong application of Respondent - assessee is a manufacturer of motor vehicles. Appellant - Department issued show cause notice to the assessee demanding duty on the advertisement expenses initially incurred by the assessee and subsequently reimbursed from the dealers since such reimbursement is E includible in the assessable value. It invoked extended period of limitation since the assessee did not disclose to the Department about the reimbursement of expenses. Adjudicating Authority upheld. the demand holding that the advertisement expenses were incurred by the assessee and charged to the dealers in addition to expenses incurred by the assessee F and as such were includible in the assessable value. Assessee filed an appeal. Tribunal allowed the appeal, applying the ratio in Philips India ltd v. Collector of Central Excise, Pune and Mahindra & Mahindra ltd v. Collector of Central Excise, Bombay, without discussing the evidence on record. Hence the present appeal. G Allowing the appeal and remitting the matter to the Adjudicating Authority, the Court HELD: In the instant case, the fundamental point is whether the reimbursements claimed by the manufacturer are includible in the assessable value and whether such reimbursement would constitute H 1118 I ,, ' C.C.E. v. BAJA.I TEMPO LTD. [KAPADIA, .I.] 1119 "advertisements by the dealers on their own account" or whether they A would fall in the category of "advertisements solely made by the assessee on their own account" for computing the assessable value. These questions were not the subject matter of the decisions in Philips India ltd. and Mahindra & Mahindra ltd. Thus, the Tribunal was wrong in applying the decisions to the facts of the instant case. Hence, the impugned judgments B of the Tribunal as well as of the Adjudicating Authorn:y afe set aside and the matter is remitted back to the Adjudicating Authority for fresh decision in accordance with law. [1121-H; 1122-A-B; 1122-CJ Philips India ltd. v. Collector of Central Excise, Pune, (1997) 91 ELT 540 and Mahindra & Mahindra ltd v. Collector of Central Excise, Bombay, C (1998) I 03 EL T 606, distinguished. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3840of1999. From the Judgment and Order dated 9.3.1999 of the Central Excise Custom and Gold (Control) Appellate Tribunal, New Delhi in A.No. E/1125/ D 91-A in F.O. No. 320 of 1999-A. K.P. Pathak, Additional Solicitor General, G. Umapathy, P. Parmeswaran, S. Gowthaman and B. Krishna Prasad him for the Appellant. S. Ganesh, Thomas Vellapally, P. Venugopal, P.S. Sudheer and K.J. E John for the Respondent. The Judgment of the Court was delivered by KAPADIA, J. The short question which arises for determination in this civil appeal filed by the Department under section 35L(b) of the Central F Excise Act, 1944 is - whether reimbursement of advertisement expenses by the manufacturer from the dealers, after initially incurring the same, 1s includible in the assessable value. Mis Bajaj Tempo Ltd., the respondent herein is engaged in the manufacture of motor vehicles falling under Chapter 87 of Central Excise G Tariff Act, 1985. On 18.10.1989, show-cause notice was issued to M/s Bajaj Tempo Ltd. (hereinafter referred to for the sake of brevity as "the assessee") by the department demanding Rs. 4,73,690.76 for the period 1984-85 to 1988-89 by invoking extended period of limitation. In the show-cause notice, it was alleged by the department that the assessee had failed to disclose and H 1120 SUPREME COURT REPORTS [2005] I S.C.R. A had failed to pay appropriate duty on the expenses incurred on its publicity/ advertisement which in turn promoted
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