MURKUMBI MANUFACTURING Vs. COMMISSIONER OF C. EX., BELGAUM

JUDGEMENT

(1.) THIS appeal arises from Order -in -Appeal No. 426/2002 -C.E., dated 11 -7 -2002. The Revenue had proceeded against the assessee to consider M/s. Murkumbi Manufacturing (hereinafter referred to as the appellants or the assessee) and M/s. Murkumbi Bio -Agro Pvt. Ltd (hereinafter referred to as M/s. MBAPL as short) are to be related persons. After due consideration, the Assistant Commissioner of Central Excise, Belgaum in Order -in -Original had dropped the proceedings by holding that they are not related persons. The Revenue filed an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) upheld the Assistant Commissioners finding that the appellant and M/s. MBAPL are not to be related persons. The Revenue has not filed any appeal in that aspect of the matter. The assessee is aggrieved with the finding of the Commissioner (Appeals) pertaining to levy of duty on advertisement as well as promotional expenses incurred by M/s. MBAPL and held that the same have been incurred on the appellants behalf. The appellants contention is that the Commissioner (Appeals) has gone beyond the show cause notice and the show cause notice had not raised a demand on the advertisement charges. Therefore, the order is beyond the scope of the Commissioner (Appeals). The appellant also submitted that even otherwise, the advertisement expenses incurred by M/s. MBAPL was also on their record and the same had not been incurred on behalf of the appellants. The learned Counsel relied on the ruling rendered by the Tribunal in the case of CCE v. Escorts Ltd. [2002 (145) E.L.T. 312 (T)] wherein it has been held that the advertisement expenditure incurred by the dealers of the assessee is not includible to determine the assessable value. The same view has been expressed in the case of Shriram Honda Power Equipment Ltd. v. CCE, [1999 (114) E.L.T. 98 (T)].

(2.) HEARD the learned JDR who re -iterated the views of the Department.

(3.) ON a careful consideration of all the materials including the show cause notice, we are of the considered opinion that the cost of the advertisement expenses and promotional expenses are not required to be added in the assessable value as the appellants and M/s. MBAPL are clearly held not to be related persons. Furthermore, it is the contention of the assessee that such expenses were not incurred by M/s. MBAPL on behalf of the assessee, being independent units. Therefore, that expenses cannot be added to the assessable value. We find that in the light of the facts of the case, the finding arrived at by the Commissioner (Appeals) that the advertisement and promotional expenses incurred by M/s. MBAPL is required to be added in the assessable value is not a correct finding as both the units are held not to be related persons. There is no nexus in advertisement and promotional expenses with the transaction value of the assessee. The Tribunal rulings rendered in the cases of CCE v. Escorts Ltd. (supra) and Shriram Honda Power Equipment Ltd. v. CCE (supra) are clearly applicable to the facts of this case. Therefore the appellants plea is accepted in the light of the aforestated judgments by allowing the appeal. Ordered accordingly.