SRIGANGANAGAR BOTTLING CO. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants are manufacturers of soft drinks. The advertisement cost incurred by them is partly shared by M/s. Britco Food Company Ltd. That company is also engaged in the manufacture of the same soft drink, though in cans and big bottles. Further, they are also the suppliers of concentrate of several drinks to the appellants. The impugned orders have held that the appellants should pay central excise duty on the amounts reimbursed to them by M/s. Britco Foods as their share, of the advertisement cost.

(2.) It is the contention of the appellants that the common advertisement benefits both M/s. Britco Foods and the appellants and that is the reason for agreeing to share the cost of those advertisements, according to an agreed formula. It is, therefore, submitted that the amounts reimbursed cannot be treated as the appellants' receipt for the goods produced by them or expenditure incurred by the appellants in connection with their manufacturing activity, and subjected to excise duty at the hands of the appellants. During the hearing of the case, the learned Counsel for the appellants submitted that the issue raised in this appeal remain settled in favour of the appellants by the decision of the Apex Court in the case of Philips India [1997 (91) E.L.T. 540 (S.C)]. We have heard the learned DR also.

(3.) M/s. Britco Foods and the appellants are manufacturers of the same soft drinks. Therefore, both benefited from the advertisement for the soft drinks. In such a case, the question of making one pay duty on the cost borne by the other party, as though that party was the sole beneficiary of the advertisement, cannot arise. This issue remains settled by the aforesaid decision for the Apex Court.