MRF LIMITED Vs. COMMISSIONER OF CENTRAL

JUDGEMENT

(1.) THIS appeal arises from Order -in -Original No. 22/03 dated 2.9.2003 by which the Commissioner has confirmed demands in terms of the show cause notices. The Revenue proceeded to include the advertisement expenses, marketing expenses in respect of intermediate goods cleared to the sister unit of the assessee under Section 11A of the CE Act 1944. The appellant's contention is that these elements cannot be added in the assessable value as held by the Tribunal in the case of BMF Beltings Ltd. v. CCE, Hyderabad , Premier Irrigation Equipment Ltd. v. CCE, Kolkata -VII , Tecumseh Products India Ltd. v. CCE, Hyderabad -I ; Arthi Industries Ltd. v. CCE, Vapi ; National Aluminium Co. Ltd. v. CCE, Bhubaneswar -I . It is also brought to the notice of the Bench that the Board also issued a circular in 2003 holding that these elements cannot be added in the assessable value when the intermediate goods are cleared to the sister units.

(2.) THE learned JDR submitted that the Circular of 1996 would apply as it pertains to period 1996 -97 and 1997 -98, which directed for including these two elements in the assessable value.

(3.) ON a careful consideration, we notice that the Tribunal in the BMF Belting Ltd. (supra) dealt with regard to the period from November 1995 to October 2000. In this case noting the judgment of GOI v. MRF Ltd. ; Jay. Yuhshin Ltd. v. CCE; UOI v. Bombay Tyre International Ltd. reported in 1983(14) ELT 1896 (SC). The Tribunal clearly held that when there is a stock transfer of the goods to their sister units, then selling expenses and administrative overheads like marketing, project management, corporate office expenses are to be excluded as they cannot be selling to self. The above view was affirmed by the above cited judgments, therefore the issue is fully covered by these judgments and the confirmation of demands on these elements is not correct in law. Respectfully following the ratio of these judgments, the impugned order is set aside and the appeal is allowed.