Page 269 - ELT_15th July 2020_Vol 373_Part 2

2020 ] INDO RUBBER AND PLASTIC WORKS v. COMMISSIONER OF CUSTOMS, NEW DELHI 251

name ‘Vicky’. They are also engaged in importing and distribution of sports
goods of ‘Li Ning’ brand of sports goods like Badminton Racquets, shuttles,
shoes, clothes, bags, water bottles etc. from M/s. Sunlight Sports Pte. Ltd., Sin-
gapore.
2. The appellant entered into a distribution agreement dated 1-1-2010
with Sunlight sports for the purpose of import and sale of ‘Li Ning’ branded
sports goods within India (except Tamil Nadu, Andhra Pradesh & Kerala). Arti-
cle 7 of the agreement pertains to marketing, advertising and promotion of the
‘Li Ning’ products within India. Relevant extracts from the distribution agree-
ment are reproduced below :
“Article 4 -
The Distributor will use its best endeavours to promote and extend sales of
Goods within the Territory.
Article 7 -
The Distributor will bear all costs of Marketing, Advertising and promo-
tions for the Territory.
“The Distributor-(appellant) hereby expressly agrees to implement such
programmes and incur such advertising and promotional expenditure as
may be agreed during such discussions. In the event that the Company
(Sunlight Sports) agrees to be responsible for any expenditure in connection
therewith, and that the Distributor shall incur expenses on its behalf, the
Distributor hereby expressly agrees that it shall not, at any time, spend
more than the amount that the Company shall have agreed in writing shall
be so spent. Any claims by the Distributor on the company in respect of
such expenditure, shall be supported by vouchers evidencing the sums
claimed.”
3. Further, Sunlight Sports (represented by appellant) has entered into
an agreement with Karnataka Badminton Association (KBA) dated 12-9-2012 for
promotion of the ‘Li Ning’ products. Under this agreement, Sunlight Sports have
to provide various sports equipment to KBA. In turn, Sunlight Sports and the ‘Li
Ning’ brand becomes the title sponsor for State Championships and the sponsor
for various other badminton events conducted by KBA. Further, KBA teams rep-
resenting the State at State or National level tournaments are obliged to use ‘Li
Ning’ branded equipment, clothes, shoes etc. The territory assigned to the appel-
lant for distribution is whole of India except the States of Tamil Nadu, Andhra
Pradesh and Kerala.
4. Another agreement dated 1-2-2014 has been entered into by Sunlight
Sports, with Ms. P.V. Sindhu, a prominent badminton player, through M/s.
Sporty Media Solutionz Pvt. Ltd., the management company representing Ms.
Sindhu. Under this agreement, Sunlight Sports undertakes to provide various ‘Li
Ning’ branded products to Ms. Sindhu free of cost along with a sponsorship
amount in cash, including tournament bonuses payable on reaching a particular
stage of the tournament. In turn, Ms. Sindhu agrees to promote the ‘Li Ning’
branded products.
5. Similar other agreements have been entered into by Sunlight Sports
for promotion of the ‘Li Ning’ brand within India. Such agreements have been
signed by the Manager of the appellant, on behalf of Sunlight Sports/appellant
firm.

EXCISE LAW TIMES  15th July 2020  269