P. Venkatarama Reddi, J. - (1.) The question raised in these appeals filed by the assessee under 35L(b) of the Central Excise Act is whether the royalty amount collected by it from the bottlers for use of the trademark lehar on the soft drink beverages manufactured out of the concentrate sold by the appellant is includible in the assessable value of the concentrates. The appellant and its buyers (hereinafter referred as the bottlers) are governed by an agreement captioned as "PFL Bottling Appointment and Trademarks Licence Agreement With Bottlers", the terms of which we shall advert later.
(2.) For the period 1.9.1992 31.3.1993 (which is covered by C.A.No.4051 of 1995) and for the period 1.4.1993 31.12.1993 (which is covered by C.A.No. 1385 of 1999), the appellant filed pricelists of their product. On perusal of the details furnished with the pricelist, the Department became aware of the fact that royalty charges were being received by the appellant under the terms of an agreement permitting the use of trademark lehar. The Assistant Collecr of Central Excise and Cusms, Patiala issued show cause notices proposing the inclusion of the royalty charges in the assessable value and demanding duty on that basis. We are not concerned here with the advertising expenses which was also the subject matter of show cause notices issued for the earlier period. The objections filed by the appellant-assessee were overruled by the adjudicating authority and orders were passed approving the pricelists subject the addition of royalty charges and advertising expenses and demanding differential duty for the clearances made during the said period. The adjudicating officer ok the view that the sale of the concentrate was interlinked with the royalty charges inasmuch as the concentrate is sold only those who agree pay for the brand name. The appellate Collecr rejected the assessees appeal and confirmed the order of adjudication. On further appeal the Tribunal, no relief was granted as regards the royalty charges though the appeal was allowed in regard the other disputed items. The Tribunal observed thus: "...It is thus plain that the licence " use the appellants trademark is granted the bottlers bound up with obligation purchase the concentrate only from the appellants. The two are inextricably intertwined. The agreement with the bottlers is thus an indivisible and composite agreement for the sale of concentrate them by the appellants and for the grant of licence them for the use of the appellants trademark on the beverages manufactured by the bottlers."...
(3.) This decision of the Tribunal which is the subject matter of appeal in C.A. 4051 of 1996 was followed by the Tribunal in respect of the subsequent period. C.A. No. 1335 of 1999 is preferred against that order.;