
    364 F. 2d 853
    GENERAL TELEPHONE & ELECTRONICS CORPORATION v. THE UNITED STATES
    [No. 208-57.
    Decided July 15, 1966.
    Defendant’s motion for rehearing denied October 14, 1966]
    
      
      Daniel M. Gribbon for plaintiff; Newell W. Ellison, attorney of record. Robert E. O'Malley, Oovington <& Burling, Theodore F. Brophy and Robert Adelson, of counsel.
    
      Robert Livingston, with whom was Assistant Attorney General Mitohell Rogovin, for defendant. Lyle M. Tu/mer and Philip R. Miller, of counsel.
    Before Cowen, Chief Judge, Laramore, Durfee, Davis and Collins, Judges.
    
   Per Curiam :

Cooperative Advertising Flam,

This case presents for the consideration of the court a legal question with which the court has already dealt in another connection, i.e., whether amounts used by a manufacturer to reimburse retailers for part of their costs in locally advertising the manufacturer’s products, under a cooperative advertising plan devised and administered by the manufacturer, constituted price readjustments by the manufacturer that entitled it to an excise tax refund under Section 3443 (a) (2) of the Internal Eevenue Code of 1939 (53 Stat. 417).

The plaintiff, General Telephone & Electronics Corporation, is a New York corporation. It is the surviving corporation resulting from the merger on March 5,1959, of General Telephone Corporation, a New York corporation, and Sylvania Electric Products, Inc., a Massachusetts corporation. The merger occurred after the petition in this case was filed on April 30, 1957, by Sylvania Electric Products, Inc. Following the merger, General Telephone & Electronics Corporation was substituted as the party plaintiff. (For the sake of convenience, Sylvania Electric Products, Inc., the original plaintiff, will usually be referred to hereafter in the opinion as “Sylvania,” and General Telephone & Electronics Corporation, the corporation that survived the merger, will usually be referred to as “the plaintiff.”)

During the period that is involved in the present litigation (from March 1,1951, through December 31,1954), Sylvania, through its Eadio and Television Division, manufactured radio and television receiving sets at a factory located in Buffalo, New York. At that time, Chapter 29 of the Internal Eevenue Code of 1939, as amended, imposed excise taxes upon a number of commodities sold by manufacturers. Among the commodities affected were radio and television receiving sets. Section 3404 of the 1939 Code, as amended, imposed upon such articles sold by a manufacturer “a tax equivalent to 10 per centum of the price for which sold.” Sylvania duly paid the manufacturer’s excise tax in connection with sales of the radios and televisions manufactured by its Radio and Television Division.

Sylvania’s Radio and Television Division provided funds under a cooperative advertising plan for partially reimbursing retail dealers with respect to costs incurred by such dealers in locally advertising Sylvania radios and televisions. In the present litigation, it is contended that the funds which Sylvania devoted to such reimbursement purposes constituted price readjustments within the meaning of Section 3443(a) (2) of the Internal Revenue Code of 1939.

In anticipation that the original prices at which manufacturers sold the commodities affected by Chapter 29 of the 1939 Code, as amended — and on the basis of which the manufacturers computed and paid the excise taxes imposed by that chapter — might be readjusted downward as the result of subsequent happenings, Congress provided as follows in Section 3443 of the 1939 Code:

(a) A credit against tax under this chapter, or a refund, may be allowed or made—
* * * * *
(2) to any person who has paid tax under this chapter with respect to an article, when the price on which the tax was ¡based is readjusted * * * by a bona fide discount, rebate, or allowance; in the amount of that part of the tax proportionate to the part of the price which is refunded or credited.

Several years ago, in the case of General Motors Corporation v. United States, 149 Ct. Cl. 749, 277 F. 2d 929 (1960), this court was first called upon to consider the question of whether amounts used by a manufacturer in partially reimbursing retail dealers under a cooperative advertising plan provided a proper basis for a refund of excise taxes under Section 3443(a) (2) of the Internal Revenue Code of 1939. General Motors sued for a partial refund of excise taxes previously paid in connection with sales by its Frigidaire Division of refrigerators to wholesale distributors. Each wholesaler distributed the refrigerators in a defined and exclusive geographical area. This distribution was generally accomplished by selling such products to independent retail dealers, who, in turn, sold them to the ultimate consumers.

The Frigidaire Division had a cooperative advertising plan that was applicable to its refrigerators (and certain other products). When the Frigidaire Division sold to a wholesale distributor products which were covered by the plan, an accrual amounting to D4 percent of the suggested retail prices of such products was made to a cooperative advertising fund account that was maintained on the Frigidaire Division’s books in the name of the particular distributor. The purpose of this account was to provide funds out of which retail dealers of Frigidaire products could be reimbursed for one-half of the costs incurred by them in locally advertising such products, if the advertising complied with certain standards prescribed 'by the Frigidaire Division in its cooperative advertising plan. The use of the following media for retail advertising under the plan was permissible: newspapers, radio, television, movie trailers, billboards, display materials, exhibits and shows, car cards, tabloids, advertising novelties, circulars, direct mail, and signs.

When local advertising of Frigidaire products was done by a retail dealer, the dealer submitted a claim, with supporting vouchers, to the appropriate wholesale distributor for one-half the cost of such advertising, if reimbursement under the Frigidaire Division’s cooperative advertising plan was desired. The distributor examined the claim for errors and to determine whether there had been compliance with the provisions of the cooperative advertising plan in connection with the advertising on which the claim was based. If the distributor approved the claim, the distributor then forwarded it to the Frigidaire Division. Upon receiving a claim previously approved by the appropriate distributor, the Frigidaire Division examined the claim for errors and to determine whether there had been compliance with the provisions of the cooperative advertising plan. If the claim was allowed by the Frigidaire Division in whole or in part, reimbursement of the claimant in the proper amount was made by the Frigidaire Division, and the amount of the reimbursement was charged on the Frigidaire Division’s books against the cooperative advertising fund account that was maintained in the name of the appropriate distributor.

General Motors sued in this court under Section 3448(a) (2) of the Internal Revenue Code of 1939 for a proportionate refund of the manufacturer’s excise taxes paid on its refrigerators, the claim being based on the reimbursements to retailers under the Frigidaire Division’s cooperative advertising plan. A divided court held (149 Ct. Cl. at p. 151) that when the Frigidaire Division partially reimbursed retail dealers for costs incurred in locally advertising products under the cooperative advertising plan, the Frigidaire Division thereby “readjusted” downward the prices at which its products had been sold. The majority opinion further said (149 Ct. Cl. at p. 753) that “the only requirement of the statute [Section 3443(a) (2) of the 1939 Code] is that some of the money which the purchaser had paid for the property should be later refunded to the purchaser.”

Subsequently, in three additional cases instituted by General Motors Corporation with respect to different tax periods, this court — again by a split decision — adhered to the position which it had taken in the 1960 opinion. The related cases are reported in 154 Ct. Cl. 866 (1961).

A different view of this same question was taken later by the United States Court of Appeals for the Second Circuit in the case of Waterman-Bic Pen Corporation v. United States, 332 F. 2d 711 (1964). As of the time when that case arose, Section 3443(a) (2) of the Internal Revenue Code of 1939 had been replaced by Section 6416 (b) (1) of the Internal Revenue Code of 1954 (68A Stat. 799), which provided in part as follows:

If the price of any article in respect of which a tax, based on such price, is imposed by chapter * * * 32 [relating to manufacturers’ excise taxes], is readjusted * * * by a bona fide discount, rebate or allowance, the part of the tax proportionate to the part of the price repaid or credited to the purchaser shall be deemed to 'be an overpayment. * * *

Also, between the time when the cause of action arose and the date when the Court of Appeals rendered its decision, Section 6416(b) (1) had been amended by Section 2 of the Act of September 14, 1960 (74 Stat. 1017, 1018), which inserted, immediately after “or allowance,” the phrase “including (hi the case of a tax imposed by chapter 32) a readjustment for local advertising * *

The taxpayer contended that the sums which it had expended for advertising allowances to its vendees under a cooperative advertising plan, whereby the vendees locally advertised the taxpayer’s products, should be regarded as price readjustments under Section 6416(b) (1) of the 1954 Code. This contention was rej ected by the Court of Appeals, which stated (332 F. 2d at p. 714) in part as follows:

* * * The purpose of § 6416(b) (1) is to prevent inequities attributable to fixing an arbitrary point in time as the date for determining the sales price by permitting a refund where subsequent events have resulted in the downward readjustment of the sales price. It was not intended to create an independent source of charges ex-cludable from the sales price.

With respect to the 1960 amendment, which inserted in Section 6416(b) (1) of the 1954 Code a specific reference to “a readjustment for local advertising” as being deductible from the price on which the manufacturers’ excise tax was computed, the Court of Appeals said (332 F. 2d at p. 716) :

* * * [The amendment] obscures as much as it clarifies hi telling us what Congress intended to tax originally. The legislative history indicates only that it was intended to clarify a very confused area of the law. * * * Indeed, it can just as well be argued that the very fact that Congress found it necessary to exclude local advertising specifically is evidence that it had not meant to do so previously. * * *

If, as held by the majority of this court in the General Motors cases, the prices at which the Frigidaire Division had sold its refrigerators were “readjusted” downward, within the meaning of Section 3443(a) (2) of the 1939 Code, when the Frigidaire Division partially reimbursed its retail dealers for local advertising conducted under the Frigidaire Division’s cooperative advertising plan, it seems clear that the plaintiff in the present case is similarly entitled to a proportionate recovery of manufacturer’s excise taxes in relation to the amounts which Sylvania’s Eadio and Television Division provided and used under its cooperative advertising plan for partially reimbursing retail dealers in connection with their local advertising costs on behalf of Sylvania radios and televisions. Although there were several differences between the cooperative advertising plan of Sylvania’s Eadio and Television Division and the cooperative advertising plan of General Motors’ Frigidaire Division, these differences were not so basic as to make the reasoning of the majority opinion in the General Motors cases inapplicable, to the present case.

One of the differences between the two plans was that whereas all the funds used under the Frigidaire Division’s cooperative advertising plan were provided by the Frigidaire Division, Sylvania’s Eadio and Television Division did not provide all the funds that were used under its cooperative advertising plan. Sylvania’s Eadio and Television Division (like the Frigidaire Division of General Motors) sold'its products to wholesalers. Each wholesaler was given the exclusive right to distribute Sylvania radios and televisions to retailers within an expressly defined geographical area; and the distributor had the responsibility for the selection and appointment of suitable retail dealers within his trading area. When the Eadio and Television Division shipped merchandise to a wholesale distributor pursuant to orders from the latter, the division added to the sales price- a 2 percent billing for cooperative advertising. That amount was credited to the distributor’s cooperative advertising account and became part of the distributor’s advertising accrual. The division also credited an equal sum to the distributor’s cooperative advertising account as a matching amount provided by the division. Thus, the wholesale distributors of Sylvania radios and televisions provided part of the funds for the cooperative advertising plan which is involved in the present case.

As retail dealers within a wholesale distributor’s trading area conducted local advertising in accordance with the Radio and Television Division’s cooperative advertising plan and submitted duly authenticated requests for reimbursement under the plan, they were reimbursed by the wholesale distributor for half of the costs incurred in connection with such advertising, and the distributor, in turn, was made whole by the Radio and Television Division out of the cooperative advertising fund account which the division maintained in the distributor’s name and for which the distributor himself had provided part of the money.

However, the circumstance that the Radio and Television Division’s wholesale distributors provided some of the funds that were used under the division’s cooperative advertising plan does not take the present case outside the rationale of the majority opinion in the General Motors cases, in so far as the portion of the money provided by the Radio and Television Division itself was concerned. The findings of fact show the extent to which the funds used in effecting partial reimbursements to retail dealers under the cooperative advertising plan were provided by Sylvania’s Radio and Television Division and the extent to which Such funds were provided by wholesale distributors; and the plaintiff is seeking a recovery in the present case only with respect to the portion provided by Sylvania’s Radio and Television Division. Under the reasoning behind the majority opinion in the General Motors cases, it would not seem to make any difference whether the cooperative advertising funds were provided wholly or only partially by the manufacturer, so long as the manufacturer’s claim for a proportionate refund of excise taxes is based only upon the manufacturer’s own outlay for cooperative advertising purposes.

It should also foe noted that while the accruals of cooperative advertising funds in the General Motors cases were based solely upon percentages of sales by the manufacturer to wholesalers, this was not wholly true of the accruals of cooperative advertising funds in the present case. As new wholesale distributors were appointed by Sylvania’s Eadio and Television Division, the division set up on its books cooperative advertising fund accounts for the new distributors, and credited to them amounts deemed by the division as sufficient to enable the distributors to begin at once a program of making money available to retail dealers within their respective areas for cooperative advertising purposes. This was done without any relationship to sales of radios and televisions to the new distributors. Also, in some instances, the division credited supplemental amounts to the cooperative advertising fund accounts of certain wholesale distributors long after their original appointments. These supplemental sums were not based upon purchases of Sylvania products by the particular distributors, and they did not match funds provided by the distributors themselves. Instead, they were special allocations made by the Eadio and Television Division out of its own funds to enable the particular distributors to make extra money available to their respective retail dealers for cooperative advertising, in order to meet unusual competitive situations.

Out of the total of $5,501,608.01 expended under the Eadio and Television Division’s cooperative advertising plan during the period that is involved in the present litigation, $2,273,396.75 was provided by the division’s wholesale distributors pursuant to the 2 percent charge on billings previously mentioned, an amount equal to the sum just mentioned was provided by the division in the form of matching funds, and $954,814.51 was provided by the division in the form of special allocations that had no direct relationship to sales of merchandise to wholesalers. However, it was the circumstance that the manufacturer in the General Motors cases utilized its funds in partially reimbursing retailers for local advertising costs under a cooperative advertising plan that led the majority of the court in the General Motors cases to say that the manufacturer’s prices for its commodities were thereby “readjusted” downward, rather than the circumstance that the particular funds used for the purpose had been accrued on the basis of percentages of sales prices. Consequently, the fact that $954,814.51 of the money utilized by Sylvania’s Eadio and Television Division under its cooperative advertising plan consisted of special allocations that had been made by the division without any direct relationship to sales of products by the division would not be a valid reason for taking the present case outside the scope of the majority opinion in the General Motors cases.

The majority opinion in the General Motors cases requires a holding in the present case that Sylvania’s Eadio and Television Division “readjusted” downward the prices at which it had sold Sylvania radios and televisions, to the extent that the Eadio and Television Division provided funds for partially reimbursing retail dealers in connection with their local advertising costs under the division’s cooperative advertising plan. Insofar as the cooperative advertising plan covered expenses which cannot fairly be characterized as advertising costs, but rather as promotional costs (see, e.g., finding 18(f)), such expenditures cannot be allowed, for the reasons given in the next section of this opinion.

Spring Promotion Plan

Sylvania’s Eadio and Television Division observed that retail dealers tended to spend most of their advertising and promotional money during the most favorable part of the year, which (in connection with radios and televisions) began in the autumn and extended into the winter. Then, in the springtime — i.e., the months of March, April, May, and June — when the market for radios and televisions customarily “softens,” dealers would have little or no money left to spend on the advertising and promotion of Sylvania radios and televisions. In order to meet this special problem, the Eadio and Television Division in 1953 devised what was called the “spring promotion plan.”

The spring promotion plan was devised in recognition of the fact that special techniques and emphases were required to stimulate 'business and move Sylvania radios and televisions in the “soft” spring market, thereby enabling Syl-vania to maintain a competitive position in the industry.

A fund for the financing of the spring promotion plan was created and maintained by adding a special charge of one-half- of 1 percent to all billings for merchandise sold to distributors. These amounts were credited to the several distributors’ spring promotion accounts. The Eadio and Television Division matched each such sum by itself providing an equal amount for the particular distributor’s spring promotion account. These accruals to a distributor’s spring promotion account occurred throughout the year, but the money was to be used exclusively for advertising and promotional activities during the springtime.

During the period from March 1, 1953, to December 31, 1954, inclusive, a total of approximately $436,500 was expended under the spring promotion plan. Half of this amount was provided by Sylvania’s Eadio and Television Division, and half was provided by the division’s distributors. A relatively small portion (approximately $34,800) of this amount was spent to reimburse dealers or distributors in connection with their advertising. The remainder was spent on discounts and special credits to distributors and dealers, and on various promotional activities.

The discounts allowed under the spring promotion plan were in addition to the discounts customarily allowed by the Eadio and Television Division, and they usually related to slow-moving radio or television models. For example, the division’s customary discount to distributors on radio and television models generally might be 30 percent, and the division would offer a springtime discount of 32 percent or 34 percent on slow-moving models. The additional discount on an order from a distributor for the specific slow-moving models would be charged to the particular distributor’s spring promotion account.

An example of a special credit in the form of merchandise under the spring promotion plan would be the sale of 10 television sets for the price of 9, so that the amount represented by the price of the extra set would be a special credit in the form of merchandise.

Cash allowances were customarily granted to dealers under the spring promotion plan to offset price reductions announced in tbe spring by distributors on models then held by dealers in stock.

Under the spring promotion plan, distributors were sometimes encouraged to run contests among the dealers in their respective trading areas, awarding to the winning dealers prizes in the form of trips to the Radio and Television Division’s Buffalo factory in order to see the modern techniques by which Sylvania products were manufactured. The winning dealers were guests of the division during such excursions. The expenses involved in these excursions were defrayed out of the spring promotion funds.

Sales promotion premiums were also made available under the spring promotion plan. These premiums included such things as television lamps or bases to be given by dealers in connection with sales of television sets, jackets with Syl-vania insignia to be worn by dealers’ salesmen or servicemen, and war bonds to dealers or their salesmen for the accomplishment of sales goals.

The Radio and Television Division’s spring promotion plan was distinct from the division’s cooperative advertising plan; and the funds which financed the spring promotion plan were separate and distinct from the cooperative advertising funds. From the procedural standpoint, the operation of the spring promotion plan was similar to the operation of the cooperative advertising plan. The paper work under the two plans was similar. The principal difference between the two plans, from the procedural standpoint, was that the spring promotion plan was seasonal in nature (except for the accrual of funds), whereas the cooperative advertising plan was in effect on a year-round basis.

The discounts to distributors and dealers on slow-moving models, the special credits in the form of merchandise, and the cash allowances on models in stock affected by price reductions, were the traditional types of price readjustments by way of discounts, rebates, or allowances that would seem clearly to come within the scope of Section 3443(a) (2) of the Internal Revenue Code of 1939. While it is true that each readjustment of this type was made out of a fund provided in part by Sylvania’s Radio and Television Division and in part by the division’s distributors, it is easy to segregate tbs portion (50 percent) provided by Sylvania from the portion provided by the distributors. In so far as the portion provided by Sylvania is concerned, therefore, it seems that such amounts should be regarded as properly forming a basis for a proportionate refund of excise taxes under Section 3448 (a) (2).

The discussion in the previous part of this opinion relative to the Eadio and Television Division’s cooperative advertising plan is equally applicable to that part of the money provided by the Eadio and Television Division for the spring promotion plan and used to reimburse distributors or dealers for advertising costs.

With respect to the funds which the Eadio and Television Division provided for the spring promotion plan and which were used for the purpose of reimbursing distributors or dealers in connection with promotional activities undertaken by them on behalf of Sylvania radios and televisions, we believe that many, if not all, of these activities fall outside of the General Motors decisions, and they would clearly be disallowed after the effective date of the 1960 amendment (covering only “a readjustment for local advertising”) which has been previously mentioned. In the light of the 1960 amendment we decline to extend General Motors beyond its fair reach covering consumer advertising, and disallow such promotional expenses as prize trips, the giving of premiums like television lamps or bases or other products, jackets with Sylvania insignia, and excursions. War bonds to dealers or their salesmen are allowable as cash discounts or rebates under General Motors Corp. v. United States, 168 Ct. Cl. 301, 339 F. 2d 648 (1964).

Special Promotion Plan (Radio and Television Division)

At about the end of 1953, Sylvania’s Eadio and Television Division concluded that, despite its national advertising (which is described in findings 14 and 15), the cooperative advertising plan discussed in the first part of this opinion, and the spring promotion plan discussed in the immediately preceding portion of the opinion, it was not getting its share of the radio and television market in many trading areas having good potentialities, especially in the large metropolitan centers of the country. An important factor in the division’s relatively poor position was that Sylvania was a latecomer in the business of marketing radio and television receiving sets. It first entered the television field as a manufacturer of television receiving sets in 1949, and the actual marketing of the sets to wholesale distributors was not begun until sometime during the first quarter of 1950. Sylvania also began the marketing of radio sets for the first time in the first quarter of I960. There were approximately 82 competing brands of radios and televisions on the market at the time when Sylvania entered the field.

In an effort to improve its competitive situation, Sylvania’s Eadio and Television Division in December 1953 instituted a special promotion plan. Under this plan, a special promotion account was established for each distributor serving what was regarded by the division as a key trading area. All the funds for such accounts were provided by the Eadio and Television Division, no charges or assessments being made against the distributors.

The funds in the special promotion accounts were available for use by distributors and their dealers in connection with advertising and promotional activities on behalf of Sylvania radios and televisions.

Expenditures under the special promotion plan were made on the basis of advertising or promotional programs submitted to the Eadio and Television Division by distributors for their respective trading areas. In submitting a program to the division for approval, a distributor would list the dealers who would participate in the program.

The Eadio and Television Division did not prescribe in advance any standard to govern expenditures under the special promotion plan. This plan required great flexibility in administration, and the division was inclined to approve any program that might be submitted by a distributor, since the division believed that the distributor should know what was needed for his particular market. The special promotion plan was designed to help meet a critical competitive situation.

The forms used for the purpose of claiming reimbursement under the special promotion plan were similar to the forms used under the cooperative advertising plan and spring promotion plan.

Most of the money provided by the Kadio and Television Division under the special promotion plan was used to reimburse distributors or dealers in connection with their advertising costs. Such expenditures were clearly within the scope of this court’s opinion in the General Motors cases.

Some of the money provided by the Kadio and Television Division under its special promotion plan was used in granting discounts and special credits to distributors and dealers, and some of the money was used to reimburse distributors and dealers in connection with promotional expenses. The discussion in the immediately preceding part of this opinion relative to expenditures out of the spring promotion, plan for discounts and special credits to distributors and dealers, and for reimbursements to distributors and dealers in connection with promotional expenses, would be equally applicable to the similar expenditures made under the Kadio and Television Division’s special promotion plan. Debates, discounts and special credits are allowable; promotional expenses are not allowable.

Special Promotion Fund (Tube Divisions)

Sylvania had two Tube Divisions during the years that are involved in the present litigation, the Keceiving Tube Division and the Picture Tube Division. These divisions manufactured and sold radio transmitting and receiving tubes, television picture and receiving tubes, and certain other electronic tubes. For all purposes relevant to this case, Syl-vania’s Tube Divisions may be considered as one division, because the promotional allowances respecting tubes that are involved in this case were made pursuant to one plan Which covered both divisions.

Manufacturer’s excise taxes were imposed by Section 3404 of the 1939 Code, as amended (26 TT.S.C. § 3404 (1946 Ed., Supp. V, and 1952 Ed.)), on the tubes sold by Sylvania’s Tube Divisions.

Sylvania’s Tube Divisions marketed their products through independent wholesalers, who were generally referred to as distributors. A typical distributor for the Tube Divisions was a wholesale seller of electronic parts of all kinds. His multiple lines of commodities customarily involved several thousand items, such as picture tubes, electronic parts, wire, and solder. Sylvania’s tube distributors did not have exclusive geographical territories.

Sylvania’s distributors of tubes sold such tubes to retail dealers. The dealers were repairmen who repaired radio and television sets. Some dealers maintained shops, while others operated out of their homes or garages.

Both the distributors and the dealers who handled Syl-vania tubes competed with one another at their respective marketing levels. In addition to handling Sylvania tubes, they generally handled tubes manufactured by Sylvania’s competitors as well.

During the years 1951-1954, Sylvania’s Tube Divisions made allowances to distributors from a special promotion fund. The Tube Divisions created this fund by setting aside each month a certain percentage (between 1 percent and 3 percent, depending on the type of tube) of the amount paid for tubes by each distributor. This resulted in the establishment on Sylvania’s books of a separate promotion account for each tube distributor, and each distributor was advised of the current status and size of his promotion fund by monthly statements from Sylvania.

All the sums credited to the tube distributors’ promotion accounts were provided by Sylvania. Unlike the cooperative advertising plan and the spring promotion plan maintained by Sylvania’s Eadio and Television Division, there was no requirement under the Tube Divisions’ special promotion plan that distributors provide part of the money required for the operation of the plan.

In creating the promotion plan for the Tube Divisions, it was Sylvania’s intention to provide funds to assist tube distributors to move merchandise from their shelves to dealers. Such assistance was thought to be advisable because most tube distributors had started in business as repairmen and they were not shilled in sales techniques.

From time to time, Sylvania supplied its tube distributors with catalogs showing various articles which any distributor could order directly from Sylvania at the catalog price and charge the amount to his promotion fund, if he desired to do so. These articles included signs, window display hits, telephone -booh covers, Zippo lighters, salesmen’s cards, shipping labels, calendars, clochs, service hits, tube chests, tools, technical manuals, and various other similar articles which the distributor might either retain or pass on to his dealers, at his discretion.

During the years 1952-1954, a portion of the expenditures from the Tube Divisions’ special promotion fund resulted from two separate programs involving the use of scrip. The first of these was the “certificate program,” whereby Sylvania at various times offered to its tube distributors one specific item, such as a chassis carrier for transporting television sets. For example, Sylvania informed its tube distributors that they could, if they desired to do so, purchase a chassis carrier from Sylvania for $16 on the following terms: each distributor would receive a $5 certificate with the purchase of every 750 receiving tubes; this $5 certificate could be used by the distributor only toward the purchase of the chassis carrier; and if the distributor desired to purchase the chassis carrier, he forwarded the $5 certificate to Syl-vania, and the balance of the cost of the chassis carrier ($11) was charged to his special promotion fund.

Another plan involving the use of scrip pursuant to which expenditures were made from the Tube Divisions’ special promotion fund was the “premium program.” Under this program, each distributor was informed from time to time that he could order from Sylvania special premium certificates, the denominations of which were shown in numbers of tubes. For example, a distributor could order a stock of “50 tube” certificates, “100 tube” certificates, or “300 tube” certificates, and each such certificate was charged to the distributor’s special promotion fund at the rate of 750, $1.50, or $4.50, depending on the denomination. If a dealer purchased 50, 100, or 300 tubes from the distributor, the latter was encouraged to give the dealer a “50 tube,” a “100 tube,” or a “300 tube” certificate, as the case might be. A dealer, having obtained these certificates as a result of purchases of tubes from his distributor, was entitled to make use of a special catalog (which Sylvania had distributed) in selecting gift items shown in the catalog, so long as the selecting dealer had in his possession the requisite number of tube certificates specified by the catalog as payment for the particular items.

The merchandise offered by Sylvania’s Tube Divisions under the special promotion plan was offered at cost or at a price which produced a slight loss to Sylvania.

Tube distributors were also permitted to use their allocations of special promotion funds for other promotional purposes selected on their own initiative, such as the giving of antifreeze during the winter season to dealers in connection with sales of Sylvania picture tubes, and the painting of distributors’ trucks with identification signs and the Sylvania emblem.

Sylvania did not prescribe in advance any standards to be used in determining whether a particular type of expenditure would be regarded as a proper charge against the Tube Divisions’ special promotion fund. Any promotion plan that seemed likely to fulfill the intent of moving merchandise from a distributor’s shelf to dealers was customarily approved by Sylvania under the plan.

Funds under the Tube Divisions’ special promotion plan were used exclusively for promotional activities.

For the reasons previously given in this opinion we hold that the plaintiff’s special promotion fund for the Tube Divisions cannot be taken into account in computing the tax refund. As far as we can tell, that fund covered promotional activities, not retail advertising, and was entirely comparable to the promotional parts of the Spring Promotion Plan and Special Promotion Plan of the Eadio and Television Division. Plaintiff urges that, because it did not prescribe any advance standards for the plan and customarily approved any likely project proposed to it, tbe Tube Divisions’ promotion plan was in fact equivalent to a cask discount plan under wkick the distributors and dealers could use the money as they saw fit, for any purpose. The facts do not support that position. In greatest part the plan was limited to (i) the supplying of items and materials from special Sylvania catalogs, (ii) the “certificate program”, and (iii) the “premium program.” Even as to the minor part of the plan used for promotional purposes selected entirely on the distributors’ own initiative, there is no showing that those receiving the funds could use them as freely, without restriction, as they could use cash.

Conclusion

For the reasons set out in this opinion, the plaintiff is entitled to recover under Section 3443(a) (2) of the 1939' Code with respect to Sylvania’s expenditures under the Eadio and Television Division’s cooperative advertising plan, part of the spring promotion plan, and part of the special promotion plan, but not with respect to the Tube Divisions’ special promotion plan. Accordingly, judgment will be entered for the plaintiff on the issue of liability, and the case will be remanded to the commissioner for further proceedings under Eule 47 (c) (2) to determine the amount of the recovery.

Davis, Judge,

concurring :

I join the court’s opinion but add some words on the relationship of this case to General Motors Corp. v. United States, 149 Ct. Cl. 749, 277 F. 2d 929 (1960), and 154 Ct. Cl. 866 (1961) (the Frigidaire cases). Because of the intervening decision of the Second Circuit disagreeing with this court’s General Motors (Frigidaire) opinion (Waterman-Bic Pen Corp. v. United States, 332 F. 2d 711 (1964)), I would normally feel bound to evaluate anew the correctness of our position. See Mississippi River Fuel Corp. v. United States, 161 Ct. Cl. 237, 246, 314 F. 2d 953, 958 (1963) (concurring opinion). In the present case, however, the defendant does not ask us to reconsider or overturn General Motors (Frigidaire) , and the Congressional amendment of September 14, 1960, 74 Stat. 1017, 1018 (including within the concept of “readjustment” an allowance for local advertising) deprives General Motors (Frigidaire) of practical impact on taxable years following that change. This suit concerns 1951-1954, and so far as we know the issues it raises are “dead-end” in the sense that they will not arise after 1960. In these circumstances, I see no need to reconsider General Motors (Frigidaire) and concur with the court that it should be fairly applied, without reassessment, to the present case. On that premise I agree that, with respect to consumer advertising, the distinctions defendant draws ’are insignificant and immaterial. To accept them would be to reject the necessary holding of the earlier cases.

On the other hand, the 1960 amendment and the 'Waterman-Bio decision influence me not to extend GeneralMotors (Frigidaire) beyond the compass fairly presented by its facts as this court understood them. That was a consumer or retail advertising case and did not involve promotional activities. Eetail advertising can be considered as within the sphere of the distributor and dealer, not the manufacturer; but much, if not all, of the promotional activities we have here are properly characterized as expenses to be borne by this plaintiff and within its sphere as manufacturer. In any event, I do not regard these promotional expenditures as a refund of part of the price paid by the purchaser.

FINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner Mastín G. White, and the briefs and arguments of counsel, makes findings of fact as follows:

General

1. The plaintiff, General Telephone & Electronics Corporation, a New York corporation, is the surviving corporation resulting from the merger on March 5, 1959, of General Telephone Corporation, a New York corporation, and Syl-vania Electric. Products, Inc. (the original plaintiff in this action, hereinafter called “Sylvania”), a Massachusetts corporation.

2. Sylvania was at all relevant times engaged in the manufacture and sale of various electrical articles, including (from time to time) radio and television receivers, phonographs, radio receiving tubes, television picture tubes, electric light bulbs, and photoflash and photoflood lamps. This case is a suit for refund of a portion of the manufacturers’ excise taxes paid on certain of such articles by Sylvania, as required by Chapter 29 of the Internal Eevenue Code of 1939, for the period from March 1, 1951, through December 31, 1954.

3. For the period from March 1,1951, through December 31, 1954, Sylvania duly paid Federal manufacturers’ excise tax in the amount of $49,206,435 on products manufactured by it which were taxable under Chapter 29 of the Internal Eevenue Code of 1939. The amount of said excise taxes was included in Sylvania’s invoices to its customers and paid by them to Sylvania.

4. No refund of excise tax from said amount of $49,206,435 has been made to Sylvania or the plaintiff by reason of expenditures made by Sylvania in connection with its cooperative advertising plan or other promotional activities.

5. (a) Sylvania filed with the District Director of Internal Eevenue for the Upper Manhattan District (New York) the two claims for refund specified in paragraphs (b) and (c) of this finding, totaling $588,673.41, which amount inadvertently included refunds attributable to certain expenditures (not involved in this case) paid in 1955. This suit is for $577,227.98, the amount which the plaintiff contends would be refundable if certain of Sylvania’s advertising and promotional expenditures in the amount of $5,460,725.75 during the period March 1,1951-December 31,1954 were held to be refmidable under Section 3443(a) (2) of the Internal Eeve-nue Code of 1939. Both of these claims for refund were filed in accordance with law and applicable regulations of the Secretary of the Treasury.

(b) On or about April 29,1955, Sylvania filed a claim for refund on Form 843 with the said District Director of Internal Eevenue in the amount of $521,291.88.

(c) On or about June 24,1955, Sylvania filed a claim for refund on Form 843 with the said District Director of Internal Eevenue in the amount of $67,381.53.

6. No refund bas been made to Sylvania or the plaintiff, and no other official action has been taken, with respect to the claims mentioned in finding 5.

7. (a) Sylvania was divided, for organizational and operational purposes, into several divisions. During the years 1951 through 1954, Sylvania had a Radio and Television Division, a Lighting Division, an Electronics Systems Division, an Atomic Energy Division, a Tungsten and Chemical Division, a Parts Division, an Electronics Division, and two Tube Divisions.

(b) Only Sylvania’s Radio and Television Division and two Tube Divisions are involved in the present action.

(c) All of the expenses of advertising and promotion with which this action is concerned, paid for wholly or in part by Sylvania, were reflected in the pricing of company products by management.

Radio and Television Division

8. (a) Sylvania’s Radio and Television Division manufactured and sold radio and television receiving sets.

(’b) During the period that is involved in this litigation, Sylvania’s Radio and Television Division had a manufacturing plant located at Buffalo, New York.

9. (a) Sylvania first entered the television field as a manufacturer of television receiving sets in 1949. The actual marketing of the sets to wholesale distributors was not begun, however, until sometime during the first quarter of 1950.

(b) At the time when Sylvania entered the business of marketing television sets, it also began the marketing of radio sets for the first time. Previously, Sylvania’s predecessor, the Colonial Corporation, had manufactured radio sets for a single customer, Sears Roebuck & Company, which sold the radio sets at retail under its own “Silvertone” 'brand name.

(c) Sylvania was a latecomer in the business of marketing radio and television receiving sets. There were approximately 82 competing brands of radios and televisions on the market at the time when Sylvania entered the field.

10. (a) In the early part of 1950, Sylvania’s Eadio and Television Division began a program for the appointment of franchised wholesalers to distribute Sylvania radios and televisions within specified trading areas. The objective was the establishment of a franchised distributing organization whereby different trading areas would be delimited geographically, and a wholesale distributor would be appointed and franchised by the division for each trading area. A franchised wholesaler was given the exclusive right to distribute Sylvania radios and televisions to retailers within the trading area covered by the wholesaler’s franchise.

(b) Because of Sylvania’s late entry into the field of marketing radio and television receiving sets, it took the Eadio and Television Division several years to complete the process of obtaining national coverage for t'he distribution of its products. During the first 6 or 8 months, the division appointed only 10 or 12 wholesale distributors; in 1951 the division had 51 distributors; in 1952 it had 69 distributors; in 1958 it had 74 distributors; and in 1954 it had 75 distributors.

(c) The wholesale distributors of Sylvania radio and television receiving sets customarily handled multiple lines of commodities. Most of them carried what, in the vernacular of the appliance business, are called “white goods,” such as kitchen ranges and refrigerators. Many of them also handled smaller household items, such as toasters, broilers, and mixers. While handling other appliance lines, distributors were restricted to Sylvania products in so far as radios and televisions were concerned.

(d) The standard agreement between Sylvania’s Eadio and Television Division and its distributors contained (among other things) the specific provision as to advertising that “Distributor agrees to accept and abide by Manufacturer’s advertising program as indicated from time to time by Manufacturer.” With respect to prices and orders, the standard agreement provided that all merchandise was to be sold at the manufacturer’s list prices prevailing at the time of shipment, and that title to the merchandise was to pass upon delivery by the manufacturer to the carrier at Buffalo, New York, the city in which the manufacturer’s plant was located.

11. (a) A wholesale distributor franchised by Sylvania’s Radio and Television Division for a particular trading area was responsible for the appointment within the trading area of an organization of retail dealers through whom Sylvania radio and television receiving sets were sold to the ultimate consumers. The responsibility for the recruitment of suitable dealers to handle the Sylvania line was quite difficult to discharge in view of the late entry of Sylvania into the business of marketing radios and televisions.

(b) The ability of a distributor to select and appoint suitable dealers was an essential part of the distributor’s function. In connection with the process of recruiting dealers, Syl-vania’s Radio and Television Division never questioned the selection of a dealer by a distributor. The division felt that each distributor knew the territory for which he was franchised, the local conditions, and the individual dealers, and that it was inadvisable for the division to second-guess the distributor with respect to the selection of dealers. In no case did a distributor ever request approval from the division before establishing a new dealership or before terminating a dealership.

(c) The retail dealers to whom the wholesale distributors sold Sylvania radio and television receiving sets, and who, in turn, sold such products to the ultimate consumers, were appliance stores, department stores, furniture stores, and various types of specialty stores.

(d) Retail dealers were competitive with one another. There was no specification of territorial boundaries for dealers, since such a limitation would have been impracticable.

(e) Generally, the retail dealers who sold Sylvania radios and televisions also sold radio and television receiving sets manufactured by competitors of Sylvania, as well as other appliances.

(f) In 1951 there were 5,277 retail dealers handling Syl-vania radios and televisions; in 1952 there were 5,902 such dealers; in 1953 there were 8,214 such dealers; and in 1954 there were 8,607 such dealers.

12. (a) During the years 1951-1954, Sylvania’s Eadio and Television Division did not sell its products directly to retailers or to ultimate consumers (except that some sales were made to the division’s own employees at reduced prices). Instead, as indicated in previous findings, the Eadio and Television Division sold its products to wholesale distributors, who in turn sold such products to retail dealers, who in turn sold such products to the ultimate consumers.

(b) During the period 1951-1954, Sylvania did not own any of the distributorships or dealerships handling Sylvania radios and televisions.

13. (a) During the period 1951-1954, Sylvania’s Eadio and Television Division transmitted to its distributors from time to time a document entitled “Sylvania Eadio and Television Policies.” This document set forth in broad terms the division’s statement of the respective responsibilities and functions of the manufacturer, the distributor, and the dealer.

(b) The document referred to in paragraph (a) of this finding declared that Sylvania’s advertising-promotion policy was:

(1) To maintain an aggressive, sustained national advertising program.
(2) To maintain a regularly scheduled advertising program to dealers through trade papers.
(3) To participate in the cost of dealers’ local advertising of Sylvania products through a cooperative advertising fund made up of equal contributions on the part of Sylvania and the distributor.
(4) To have available at all times, an assortment of ad mats, consumer literature, point-of-sale display material and store identification signs, and to assist distributors in merchandising this material to dealers.
(5) To make regularly available special sales promotion campaigns and merchandising plans.

14. (a) During the period that is involved in the present litigation, Sylvania’s Eadio and Television Division conducted an extensive program of national advertising. The division’s objective in its national advertising was to create among millions of people a broad acceptance of Sylvania’s brand name and products as regards radio and television receiving sets. The division’s program of national advertising was based generally on the premise that the division had to make radio and television receiving sets by the thousands, that its distributors in turn had to stock such products by the hundreds, and that ultimately the retail dealers had to sell them one by one. Therefore, the division tried in its national advertising to create a predisposition or acceptance for the brand name “Sylvania” and for the products manufactured by the division, with the idea that the retail dealers could capitalize later on this predisposition or acceptance in selling Sylvania products one by one through their own local advertising.

(b) In its national advertising during the period that is involved in the present litigation, the Eadio and Television Division emphasized the “Halo Light” feature of Sylvania television receiving sets. “Halo Light” was an illuminated area immediately surrounding the picture tube. At the time, optical experts were stressing the possibility of eyestrain from television viewing; and the Eadio and Television Division discovered by laboratory tests that if the illuminated area was expanded, there was no longer the sharp contrast between the illuminated scene and the area immediately surrounding it, and that the halation of light out beyond the viewing area decreased eyestrain. The Eadio and Television Division stressed this “Pialo Light” feature, of Sylvania television receiving sets above all else in its national advertising. It was only through national advertising that the division was successful in securing the attention of the public for this feature.

(c) The division’s national advertising featured the name “Sylvania,” and it was always devoted exclusively to Syl-vania products. Such advertising did not stress the prices of Sylvania’s radio or television models.

(d) In its national advertising, the Eadio and Television Division never referred to particular distributors or dealers by name, although an advertisement might suggest that the reader, viewer, or listener visit his “neighborhood dealer” for a demonstration of Sylvania products.

(e) Magazines with nationwide circulations comprised one medium in which the Eadio and Television Division’s national advertising appeared. Among the magazines that were used for this purpose were Life, Look, Saturday Evening Post, Ebony, Parade, This Week, and Progressive Earmer. In such magazines, the division ran its basic product story as a means of preconditioning the buying public to Sylvania’s brand name on radios and televisions, and of emphasizing the features of these products.

(f) Sylvania’s Eadio and Television Division also ran some of its national advertising in newspapers. Such advertising was similar, as regards copy and illustrations, to the national advertising that appeared in magazines. The preponderance of the national advertising in newspapers was run in well-known, recognized newspapers published in metropolitan centers, such as the New York Daily News, the St. Louis Post-Dispatch, the Detroit Free Press, the Cleveland Plain Dealer, and the Pittsburgh Post Gazette. However, national advertising in newspapers was run in virtually every city in which a wholesale distributor of Sylvania radios and televisions was located.

(g) As a phase of its national advertising during at least part of the period involved in the present litigation, Syl-vania’s Eadio and Television Division defrayed a portion of the cost of a weekly television program called “Beat the Clock.” This was an overall corporate advertising program by Sylvania. About every 5 or 6 weeks, the Eadio and Television Division was allotted the advertising time on the program for commercials telling the story of Sylvania radios and televisions. (On other weeks, the commercial time was allotted to the products manufactured by the various other divisions of Sylvania.) Also, on one occasion during the period that is involved in this litigation, Sylvania’s Eadio and Television Division sponsored, as part of its national advertising, a television “spectacular.” It was a Lincoln’s Birthday program, in which a Hollywood actor was featured in the role of Abraham Lincoln. The Kadio and Television Division supplied the commercials for use in connection with the program, which was widely advertised in advance.

(h) Trade papers were also used as a medium for the Kadio and Television Division’s national advertising, the objective being to reach prospective distributors and dealers Who might be interested in the division’s product line and the opportunity for profits that the line afforded. This was extremely important during the early years of Sylvania’s entry into the field of marketing radio and television receiving sets, inasmuch as many other brand names of radios and televisions had already gained public acceptance, and it was important for Sylvania’s Kadio and Television Division to reach strong distributors and dealers, and to attract them to Sylvania’s line, if possible.

(i) Some of the Kadio and Television Division’s national advertising consisted of printed folders, brochures, and direct mail pieces of various types Which illustrated Sylvania radios and televisions, and which were intended for distribution to the ultimate consumers.

(j) The Kadio and Television Division’s national advertising was regarded as a cost of doing business, and the cost was reflected in the selling price of the division’s products.

(k)' Sylvania’s Kadio and Television Division had an advertising department. In addition, the division (unlike Syl-vania’s other divisions) had its own advertising agency, Kenyon-Eckhardt, located in New York City.

15. During the years 1951 through 1954, Sylvania spent an average of about $2.2 million per year for its national advertising. The following chart shows a breakdown of Syl-vania’s national advertising expenses for the years 1951 through 1954, according to media and type of advertising:

16. During the period that is involved in the present litigation, most of the retail dealers handling Sylvania radio and television receiving sets engaged in advertising within their respective localities. This was necessary in a business sense because, although Sylvania’s Eadio and Television Division might through national advertising create acceptance for the Sylvania brand name and for Sylvania products, this was meaningless unless the consumer knew specifically where to go if he wished to see, and perhaps to buy, the products. Supplying the latter type of information was the job of local retail advertising, as done by dealers. Therefore, a principal advertising objective of a Sylvania dealer was to tell members of the public in his locality where Sylvania radios and televisions could be purchased. It was the inclination of a retail dealer to advertise on the basis of anything that would pull customer traffic through his front door, and this was often a price appeal, or an. emphasis on the convenience of his location, or an emphasis on the availability of repair service at his establishment. It was characteristic of dealer advertising that it said virtually nothing about quality, or about the craftsmanship that went into the Sylvania radios and televisions, or about the standout features of the instruments, or about other factors of the type customarily emphasized in the national advertising of Sylvania’s Eadio and Television Division.

Cooperative Advertising Plan

17. (a) In the early part of 1950, Sylvania’s Radio and Television Division devised and instituted a cooperative advertising plan under which the division and its wholesale distributors jointly provided funds to be used in assisting retail dealers by defraying half the cost of local advertising done by dealers relative to Sylvania radios and televisions. As a new wholesale distributor was franchised by the Radio and Television Division, the division set up on its books a cooperative advertising account for the new distributor, and credited to the account an amount deemed by the division as sufficient to enable the distributor to begin at once a program of making money available to retail dealers within his trading area for cooperative advertising purposes. Thereafter, as the Radio and Television Division shipped merchandise to a wholesale distributor pursuant to orders from the latter, the division added to the sales price a 2 percent billing for cooperative advertising. That amount was credited to the distributor’s cooperative advertising account and became part of the distributor’s advertising accrual. The division also credited an equal sum to the account as a matching amount provided by the division.

(b) Sylvania did not pay any excise tax on the 2 percent extra charge that was assessed against distributors by the Radio and Television Division under the division’s cooperative advertising plan.

(c) In some instances, the Radio and Television Division credited supplemental amounts to the cooperative advertising accounts of certain wholesale distributors. These supplemental sums were not calculated on the basis of purchases of Sylvania products by the particular distributors, and they did not match funds provided by the distributors themselves. Instead, they were special allocations made by the Radio and Television Division out of its own funds to enable the particular distributors to make extra money available to their respective retail dealers for cooperative advertising, in order to meet unusual competitive situations at the dealer level.

(d) A retail dealer of Sylvania radios and televisions, having engaged in local advertising that featured such prod-nets and having received an invoice covering the charge for the advertising, customarily paid the full amount of the charge to the medium that ran the advertisement. He then mailed the invoice and supporting papers, together with a claim for reimbursement to the extent of 50 percent of the cost, to the wholesale distributor for the particular trading area. The distributor, in turn, forwarded the papers to Sylvania’s Eadio and Television Division. The division’s advertising department examined the claim and supporting papers, and decided whether reimbursement to the extent of 50 percent of the cost of the advertisement was appropriate under the provisions of the cooperative advertising plan. If the claim was approved, the division debited the distributor’s cooperative advertising account by the amount of the claim, and credited his merchandise account (which showed the amounts due from the distributor to Sylvania’s Eadio and Television Division as the result of sales of merchandise to the distributor) by the same amount. A copy of the credit memorandum was sent to the distributor. The distributor, in turn, paid the amount of the claim to the retail dealer. (Sometimes, when a distributor believed that the retail advertising which formed the basis for such a claim was clearly within the provisions of the cooperative advertising plan, the distributor would pay the amount of the claim to the retail dealer in advance of securing approval from the Eadio and Television Division.)

(e) Claims submitted by retail dealers on the basis of newspaper advertisements were accompanied by copies of the advertisements; and in the case of claims based on radio or television advertising, the claims were accompanied by the pertinent transcripts and by affidavits from the radio or television stations to the effect that the commercials had been run and had been paid for by the claimants.

(f) All aspects of the Eadio and Television Division’s accounting under the cooperative advertising plan were covered by paper wort. At the end of each month, each distributor received an accounting of the balance available in his cooperative advertising account. This monthly statement reflected the amount in the account at the beginning of the month, the debits resulting from reimbursements during the month to dealers in the distributor’s trading area, and the additional accruals into the account during the month resulting from credits based on the 2 percent billings on invoices for merchandise and the matching amounts provided by the Eadio and Television Division. (Any supplemental amount provided during the month by the division, as indicated in paragraph (c) of this finding, would also be shown.)

18. (a) The following requirements were prescribed by Sylvania’s Eadio and Television Division with respect to the advertising by retail dealers that could qualify for reimbursement under the cooperative advertising plan:

(1) Sylvania’s Cooperative Advertising Plan is designed to keep advertising within the requirements of good business ethics as well as those of the Federal Trade Commission Act.
(2) Dealer and Distributor advertising of Sylvania merchandise must be consistent with Factory advertising and Factory-supplied literature and promotional materials. Claims as to product performance, competitive considerations and similar reference must follow the Factory pattern. There must be no deception or misrepresentation, directly or indirectly. Statements which are inaccurate, false or derogatory to other brands will result in ineligibility of the advertising under the Cooperative Plan.
(3) Maximum identity of Sylvania merchandise is required in all advertising. The Sylvania logo must appear in a size equal to the Dealer’s signature in all ads to be eligible for credit. Ads in which competitive television or radio products are included will be ineligible for credit.
(4) Advertising of Sylvania products below factory suggested list prices will make such advertising ineligible for credit. Likewise, advertising promoting special credits, discounts, or which in any way constitute price-cutting will not be eligible for credit.
(5) All advertising shall feature current Sylvania merchandise.
(6) Sylvania reserves the right to refuse approval of advertising claims which do not conform to the standards observed in our own advertising or those set forth in this Plan. In the main, if dealer advertising adheres to the phraseology employed in Sylvania national advertisements, Factory supplied literature and ad mats there can be no criticism of copy.
(7) Aside from the many legal implications of the Robinson-Patman Act as it affects advertising, it is the avowed purpose of the Factory to assure fair, equitable treatment of all Dealers and Distributors. Special concessions or financial support will not be granted to certain Distributors or Dealers that cannot be extended to all.

(b) In the outline of the cooperative advertising plan, distributors and dealers were advised that “Cooperative Advertising Funds are intended specifically for advertising to the consumer and are not to be used for trade, institutional or secondary purposes. Although such projects may be integral parts of your advertising and sales program they must be regarded as the cost of doing business and are not to be subsidized from cooperative funds.”

(c) The various media which were approved under the Radio and Television Division’s cooperative advertising plan for dealer advertising were: newspapers, radio broadcasts, television telecasts, billboards, films, car cards, home shows, direct mail, state and county fairs, printed literature and display material, classified telephone directories, exhibits and trade ¿hows, and contests and prizes. In some instances, the plaintiff reimbursed dealers under the plan for expenditures incurred by the dealers for special promotional activities. These special promotions took several different forms and included the coste of incentive items, such as electric can-openers and wrist watches furnished to distributors and dealers and passed along to consumers as an inducement to their purchase of radio and television sets.

(d) On the occasions when the commercial time in connection with telecasts of “Beat the Clock” (see finding 14(g)) were allocated to Sylvania’s Radio and Television Division, that division’s distributors or dealers could (if they wished to do so) run spot announcements at their local stations during the commercial time, and obtain reimbursement under the division’s cooperative advertising plan.

(e) The majority of the newspaper advertising under the cooperative advertising plan was placed in large newspapers, and a relatively smaller amount was placed in small community or neighborhood-type newspapers.

(f) In the year 1953, the Eadio and Television Division conducted a fairly prominent special promotion known as the Sylvania TV Seabreeze Cruise. This was an all-expenses-paid seven-day cruise to Bermuda and Nassau for those dealers who qualified by purchasing a specified number of television sets. The cost of advertising in trade papers was treated by the plaintiff as a national advertising expense. The dealers’ expenses on the trip and the costs of promotions directed to dealers were charged to the cooperative advertising fund and categorized by the plaintiff as both “special promotion” and “miscellaneous” on its cooperative advertising records. The costs of other incentive plans to induce the purchase by dealers of television sets were also charged to the cooperative advertising fund.

19. A fundamental objective of Sylvania’s Eadio and Television Division in providing a plan whereby money would be made available to assist dealers in connection with their local advertising was to ensure that the Sylvania name would be mentioned and featured in such advertising. Consequently, only retail advertising that mentioned or identified Sylvania radios or televisions was reimbursable (to the extent of 50 percent) under the cooperative advertising plan.

20. Sylvania’s Eadio and Television Division occasionally sent out to retail dealers preprints of advertisements which the division planned to run as part of its national advertising program. In doing so, the division hoped that dealers, in their local advertising, would tie in with the division’s advertising themes. However, dealers were free, under the provisions of the cooperative advertising plan, to accept or reject any such suggestion.

21. In their local advertising, dealers handling Sylvania radios and televisions determined, independently of Syl-vania’s Eadio and Television Division, the content of their advertising, the media to be used in such advertising, the time when the advertising would be run, how much money they would spend on their advertising, and what products they would advertise. However, such advertising had to comply with the broad policy requirements of the cooperative advertising plan as to content and media (see paragraphs (a), (b), and (c) of finding 18) in order to qualify for reimbursement under the plan. Dealers were not required to obtain advance approval from the Eadio and Television Division before placing any advertising for which they claimed reimbursement under the plan.

22. The Eadio and Television Division was very flexible in the administration of the cooperative advertising plan, and only a negligible number of claims for reimbursement under the plan were disallowed by the division.

23. Under the cooperative advertising plan, charges occasionally were made to a distributor’s cooperative advertising account for advertising material (such as literature, display material, and mats) furnished to the distributor or his dealers by Sylvania’s Eadio and Television Division on order. Sylvania’s actual cost of producing these materials was generally the basis for such a charge, although in some instances the charge was not equal to the cost of production. Sylvania did not realize any profit as the result of these transactions.

24. In order to be franchised by Sylvania’s Eadio and Television Division, a distributor was required to agree that he would participate in the cooperative advertising plan.

25. Eetail dealers who handled Sylvania radios and televisions were not required by the Eadio and Television Division to make use of the cooperative advertising funds mentioned in previous findings. So far as the division was concerned, dealers merely 'had the privilege of using funds under the plan if they wished to do so, although it was naturally the hope of the division that dealers would use such funds and use them effectively, since the division was anxious to increase its share of the market by increasing its sales of radios and television.

26. (a) Sylvania’s Eadio and Television Division, as a service, supplied retail dealers (either directly or through distributors) with mats and other advertising materials that featured “Sylvania” as a brand name and as a line of products. Such, materials, which were designed and produced for the division by Kenyon-Eckhardt (see finding 14(k)), were furnished 'by the division to dealers in the hope that they would see fit to use such materials in connection with their local advertising, thereby achieving a maximum identity of the name “Sylvania” in dealer advertising.

(b) The Eadio and Television Division never required that a particular mat or other advertising material be used by a dealer.

(c) Some retail dealers did not use the materials furnished by the Eadio and Television Division.

(d)- During the period 1951-1954, there was no instance in which the Eadio and Television Division refused to approve a claim for reimbursement under the cooperative advertising plan because of the refusal or failure of a distributor or dealer to use advertising material furnished by the division.

(e) Except that retail dealers sometimes used in their local advertising materials produced by Kenyon-Eckhardt and furnished to dealers by the Eadio and Television Division, retail dealers did not make use of the services of Kenyon-Eckhardt in connection with their local advertising.

27. Sylvania’s Eadio and Television Division supplied to all its distributors written copies of its cooperative advertising plan, and instructed the distributors to inform all their dealers of the terms of the plan.

28. The cooperative advertising plan, as outlined in this part of the report, was in effect throughout the period that is involved in the present litigation.

29. The following table shows the total amount of expenditures (according to media) under Sylvania’s cooperative advertising plan during the period from March 1,1951, through December 31,1954:

30. Although the cooperative advertising plan described in previous findings was broad enough to cover advertising by distributors as well as advertising by retail dealers, only a small portion (less than 4 percent) of the expenditures referred to in finding 29 related to cooperative advertising by distributors, as distinguished from cooperative advertising by retail dealers.

Spring Promotion Plan

31. (a) During the first 3 years of its experience in the marketing of radios and televisions, Sylvania’s Eadio and Television Division observed that retail dealers tended to spend most of their advertising and promotional money during the most favorable part of the year, which (in connection with, radios and televisions) began in the autumn and extended into the winter. Then, in the springtime — i.e., the months of March, April, May, and June — when the market customarily “softens,” dealers would have little or no money left to spend on the advertising and promotion of Sylvania radios and televisions. In order to meet this special problem, the Eadio and Television Division devised what was called the “spring promotion plan.”

(b) The spring promotion plan was devised in recognition of the fact that special techniques and emphases were required to stimulate business and move Sylvania radios and televisions in the “soft” spring market, thereby enabling Sylvania to maintain a competitive position in the industry.

(c) A fund for the financing of the spring promotion plan was created and maintained by adding a special charge of % of 1 percent to all billings for merchandise sold to distributors. These amounts were credited to the several distributors’ spring promotion accounts. The Eadio and Television Division matched each such sum by itself providing an equal amount for the particular distributor’s spring promotion account. These accruals to a distributor’s spring promotion account occurred throughout the year, but the money was to be used exclusively for advertising and promotional activities during the springtime.

(d) Sylvania’s Eadio and Television Division did not allocate to any distributor’s spring promotion account funds other than the matching funds referred to in paragraph (c) of this finding. Hence, each distributor’s spring promotion account was made up equally of amounts provided by the distributor (calculated on the basis of % of 1 percent of all billings for merchandise purchased by the distributor) and matching funds provided by the Eadio and Television Division.

(e) The Eadio and Television Division did not pay any excise tax on the extra charge of P/2 of 1 percent which it made on sales of merchandise to distributors for the benefit of the spring promotion plan.

32. The spring promotion plan of Sylvania’s Eadio and Television Division was separate and distinct from the division’s cooperative advertising plan described in the preceding part of this report. From the procedural standpoint, however, the operation of the spring promotion plan was similar to the operation of the cooperative advertising plan. The paper work under the two plans was similar. The principal difference between the two plans, from the procedural standpoint, was that the spring promotion plan was seasonal in nature (except for the accrual of the money), whereas the cooperative advertising plan was in effect on a year-round basis.

33. The spring promotion plan was in effect from March 1, 1953, to December 31,1954.

34. The following table indicates, by categories, the expenditures that were made under the Radio and Television’s spring promotion plan during the period March 1, 1953, to December 31, 1954:

Amount
Discounts to Distributors and Dealers_ $74, 732. 77
Special Credits to Distributors and Dealers:
Merchandise _ 3, 324. 94
Cash_ 13, 736. 93
Excursions- 46, 776. 75
Newspaper and magazine_ 4, 024.04
Kadio and television_ 5,843.27
Special advertising materials- 5,605.95
Billboard and dealer signs- 1, 932.28
Sales Promotion Premiums:
Television lamps_ 393.35
Television bases_ 34,432.11
Clothing- 1,452. 99
War Bonds_ 1,976.68
Radio and TV sets_ 7,163. 26
Miscellaneous_ 1, 364. 32
Other Promotion Items:
Free flooring- 8, 321.34
“Beat Heat” contest_ 745.00
Golden Gloves prizes_ 2,026.47
Pairs, home shows, etc_ 1,659.04
Miscellaneous_ 2, 734.69
Total_$218,246.18

35. The discounts allowed under the spring promotion plan were in addition to the discounts customarily allowed by the Eadio and Television Division, and they usually related to slow-moving radio or television models. For example, the division’s customary discount to distributors on radio and television models generally might be 30 percent, and the division would offer a springtime discount of 32 percent or 34 percent on slow-moving models. The additional discount on an order from a distributor for the specified slow-moving models would be charged to the particular distributor’s spring promotion account.

36. An example of a special credit in the form of merchandise under the spring promotion plan would be the sale of 10 television sets for the price of 9, so that the amount represented by the price of 1 set would be a special credit in the form of merchandise.

37. Cash allowances were customarily granted to dealers under the spring promotion plan to offset price reductions announced in the spring on models then held by dealers in stock.

38. In connection with the “excursions” item under the spring promotion plan, distributors were sometimes encouraged to run contests among the dealers in their respective trading areas, awarding to the winning dealers in the several areas prizes in the form of trips to the Eadio and Television Division’s factory at Buffalo in order to see the modern techniques by which Sylvania products were manufactured. The winning dealers were guests of the division during such excursions.

39. The sales promotion premiums under the spring promotion plan covered such things as television lamps or bases to be given by dealers in connection with sales of television sets, jackets with Sylvania insignia to be worn by dealers’ salesmen or servicemen, and war bonds to dealers or their salesmen for the accomplishment of sales goals.

40. There was no instance in which a dealer or a distributor was required to incur an expenditure under the spring promotion plan.

41. Distributors were required to agree that they would participate in the spring promotion plan and pay the extra y2 of 1 percent on purchases for the benefit of the spring promotion account.

Special Promotion Plan of Radio and Television Division

42. At about the end of 1953, Sylvania’s Radio and Television Division concluded that despite its national advertising, the cooperative advertising plan, and the spring promotion plan, it was not getting its share of the market in many trading areas having good potentialities, especially in the large metropolitan centers of the country. In an effort to improve its competitive situation, the division in December 1953 instituted a special promotion plan. Under this plan, a special promotion account was established for each distributor serving what was regarded by the division as a key trading area. All the funds for such accounts were provided by the Radio and Television Division, no charges or assessments being made against the distributors. The funds in the special promotion accounts were available for use by distributors and their dealers in connection with advertising and promotional activities on behalf of Sylvania radios and televisions.

43. Expenditures under the special promotion plan were made on the basis of advertising or promotional programs submitted to the Radio and Television Division by distributors for their respective trading areas. In submitting a program to the Radio and Television Division for approval, a distributor would list the dealers who would participate in the program.

44. The Radio and Television Division did not prescribe in advance any standard to govern expenditures under the special promotion plan. This plan required great flexibility in administration, and the division was inclined to approve any program that might be submitted by a distributor, since the division believed that a distributor should know what was needed for his particular market. The special promotion plan was designed to help meet a critical competitive situation.

45. Similar forms were used for the purpose of claiming reimbursement under the special promotion plan as were used under the cooperative advertising plan and the spring promotion plan.

46. The special promotion plan was in effect from December 1,1953, through December 31,1954.

47. The following table shows the total expenditures, by categories, pursuant to the Eadio and Television Division’s special promotion plan during the period from December 1, 1953, through December 31, 1954:

Discounts to Distributors and Dealers_ $53,654.59
Special Credits to Distributors and Dealers- 1,485. 00
Newspaper and magazine_ 138,464.80
Radio and television_ 63, 503.12
Special advertising materials_ 454. 47
Billboard and dealer signs_ 9,105.77
Sales Promotion Premiums
Television bases_ 332.50
Radio and TV sets_ 5, 638. 94
Rent of Space at Pairs, Home shows, etc- 890.09
Other Promotion Items_ 3,079.39
Total_$276,608.67

Tube Divisions

48. Sylvania had two Tube Divisions during the years at issue here, the Eeceiving Tube Division and the Picture Tube Division. These divisions manufactured and sold radio transmitting and receiving tubes, television picture and receiving tubes, and certain other electronic tubes. For all purposes relevant to this case, Sylvania’s Tube Divisions may be considered as one division, because the promotional allowances involved in this case were made pursuant to one plan which covered both divisions.

49. (a) Sylvania’s Tube Divisions marketed their products through independent wholesalers, who were generally referred to as distributors. During the period 1951-1954, the number of such distributors increased from approximately 500 in 1951 to approximately 800 in 1954.

(b) A typical distributor for the Tube Divisions was a wholesale seller of electronic parts of all kinds. His multiple lines of commodities customarily involved several thousand items, such as picture tubes, electronic parts, wire, and solder.

(c) The Tube Divisions did not have any formal contracts or franchise, agreements with the distributors of their tubes.

(d) Generally, the distributors of Sylvania tubes also handled tubes manufactured by other companies.

(e) Sylvania’s tube distributors did not have exclusive geographical territories. Hence, they frequently were competitive with each other.

50. (a) Sylvania’s distributors of tubes sold such tubes to retail dealers. The dealers were repairmen who repaired radio and television sets. Some dealers maintained shops, while others operated out of their homes or garages.

(b) The number of dealers using Sylvania tubes in connection with their repair work ranged from approximately 70,000 to approximately 100,000 during the period 1951-1954.

(c) It was customary for dealers to buy tubes from several different distributors.

51. Both the distributors and the dealers who handled Syl-vania tubes competed with one another at their respective marketing levels. In addition to handling Sylvania tubes, they generally handled tubes manufactured by Sylvania’s competitors as well.

Special Promotion Fund of Tube Divisions

52. (a) During the years 1951 through 1954, Sylvania’s Tube Divisions made allowances to distributors from a special promotion fund. The Tube Divisions created this fund by setting aside each month a certain percentage (between 1 percent and 3 percent, depending on the type of tube) of the price paid for tubes by each distributor. This resulted in the establishment on Sylvania’s books of a separate promotion account for each distributor, and each distributor was advised of the current status and size of his promotion fund by monthly statements from Sylvania.

(b) All the sums credited to tube distributors’ promotion accounts were provided by Sylvania. Unlike the cooperative advertising plan and the spring promotion plan maintained by Sylvania’s Radio and Television Division, there was no requirement under the Tube Divisions’ special promotion plan that tube distributors provide part of the money required for the operation of the plan.

53. In creating the promotion plan for the Tube Divisions, it was Sylvania’s intention to provide funds to assist tube distributors to move merchandise from their shelves to dealers. Such assistance was thought to be advisable because most tube distributors had started in business as repairmen and they were not skilled in sales techniques.

54. Sylvania did not direct the expenditure of funds by tube distributors or dealers under this plan. Promotions were suggested by Sylvania to distributors, but participation by the latter was voluntary. If a distributor did not wish to use a particular promotion suggested by Sylvania, he was not required to do so.

55. A tube distributor was not required to spend any money out of the promotion fund.

56. From time to time, Sylvania supplied its tube distributors with catalogs showing various articles which any distributor could order directly from Sylvania at the catalog price and charge the amount to his promotion fund, if he desired to do so. These articles included signs, window display kits, telephone book covers, Zippo lighters, salesmen’s cards, shipping labels, calendars, clocks, service kits, tube chests, tools, technical manuals and various other similar articles which the distributor might either retain or pass on to his dealers, at his discretion.

57. During the years 1952 through 1954, a portion of the expenditures from the Tube Divisions’ special promotion fund resulted from two separate programs involving the use of scrip. The first of these was the “certificate program,” whereby Sylvania at various times offered to its tube distributors one specific item, such as a chassis carrier for transporting television sets. For example, Sylvania informed its tube distributors that they could, if they desired to do so, purchase a chassis carrier from Sylvania for $16 on the following terms: Each distributor would receive a $5 certificate with the purchase of every 750 receiving tubes. This $5 certificate could be used by the distributor only toward the purchase of the chassis carrier. If the distributor desired to purchase the chassis carrier, he forwarded the $5 certificate to Sylvania, and the balance of the cost of the chassis carrier ($11) was charged to his special promotion fund. If the distributor did not desire to purchase the chassis carrier, he was free to ignore the certificates which he had received; and, in that event, no charge was made to his special promotion fund under the “certificate program.”

58. Another plan involving the use of scrip pursuant to which expenditures were made from the Tube Divisions’ special promotion fund was the “premium program.” Under this program, each distributor was informed from time to time that he could order from Sylvania special premium certificates, the denominations of which were shown in numbers of tubes. For example, a distributor could order a stock of “50 tube” certificates, “100 tube” certificates, or “300 tube” certificates, and each such certificate was charged to that distributor’s special promotion fund at the rate of 750, $1.50, or $4.50, depending on the denomination. If a dealer purchased 50 tubes from the distributor, the latter was encouraged to give the dealer one “50 tube” certificate. If the dealer purchased 100 tubes, he was entitled to a “100 tube” certificate, etc. The dealer, who thus obtained these certificates as a result of 'his purchase of a certain quantity of tubes from his distributor, was then entitled to make use of a special catalog (which Sylvania had distributed) to select any gift item shown in the catalog, so long as the selecting dealer had in his possession the requisite number of tube certificates specified by the catalog as payment for the particular item. Participation in this particular premium program was entirely within the control and discretion of each distributor. If a particular distributor preferred a different type of promotional program, he was free to decline to participate in Sylvania’s program; and, in that event, no charge was made to his special promotion fund under the “premium program.”

59. The merchandise offered by Sylvania’s Tube Divisions pursuant to the plans described in previous findings was offered at cost or at a price which produced a slight loss. Syl-vania’s Tube Divisions made no profit as a result of the purchase of any premium merchandise by tube distributors or dealers.

60. Tube distributors were also permitted to use their allocations of special promotion funds for other promotional purposes selected on their own initiative, such as the giving of antifreeze during the winter season to dealers in connection with sales of Sylvania picture tubes, and the painting of distributors’ trucks with identification signs and the Sylvania emblem.

61. Sylvania did not prescribe in advance any standard to be used in determining whether a particular type of expenditure would be regarded as a proper charge against the Tube Divisions’ special promotion fund. Any promotion plan that seemed likely to fulfill the intent of moving merchandise from a distributor’s shelf to dealers was customarily approved by Sylvania under the plan.

62. In the operation of the Tube Divisions’ special promotion fund, no cash was exchanged nor was a separate bank account kept. Instead, Sylvania periodically debited and credited the fund. The credits by Sylvania were offset by a corresponding charge to an expense account entitled “Special Sales Promotion.”

63. During the period involved in this case, Sylvania ran a series of advertisements in several trade magazines featuring various aids to servicemen, such as tube carriers and tool kits. The advertisements were run under the Sylvania name and contained illustrations of, and copy praising, the service aid. The dealer was advised to see his distributor and obtain the service aid for a certain number of tokens, or for cash plus tokens. The dealer was reminded that he was entitled to receive one Sylvania premium token with every 25 receiving tubes or each picture tube bought by him. In other similar advertisements inserted in the trade magazines featuring service aids, the dealer was advised that he could obtain the items merely by purchasing a specified number of tubes from his distributor. In the advertisements, Sylvania purported to make such an offer for a limited time on behalf of all of its distributors.

64. Sylvania’s tube distributors could not use the special promotion fund for other than promotional purposes.

65. In determining the total amounts accumulated in the fund, it made no difference whether a distributor purchased radio or television tubes.

66. Sylvania’s intention in continuing to make special promotion funds available to distributors was not only to stimulate sales by them to dealers, but also to enable Sylvania to sell more of its tubes to the distributors.

67. The amount of the Federal excise tax was separately stated on Sylvania’s invoices to its tube distributors and paid by them to Sylvania.

68. The following table shows the various categories of expenditures from the special promotion fund of the Tube Divisions during the year 1954:

Percent of Total PxvenMtitrea
Tube and Tool Chests-10.91
Tool Kits_ 5.18
Technical Manuals_ 2.12
Roxanne Window Kits_ . 65
Zippo Lighters_:_ 6.93
Tools- 5. 92
Stationery, Cards, Printing, Labels_ 7.47
Clothing and Signs_ 7.42
Dealer Promotion and Advertising_ 6. 07
Miscellaneous_19.18
Chassis Carriers_28.15
100%

69.(a) The following schedule shows a breakdown, by type of program, of the total amount of expenditures under the special promotion plan of Sylvania’s Tube Divisions during the period March 1, 1951, to December 31, 1954:

(b) Tbe amounts shown on the preceding table under the certificate program represent the face value of the certificates which were redeemed by Sylvania pursuant to the program described in finding 57. The amounts shown under the premium program represent the total amounts charged to the special promotion accounts of Sylvania’s tube distributors as a result of their orders of premium certificates to be passed on to their dealers pursuant to the program described in finding 58.

Conclusion oe Law

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that the plaintiff is entitled to recover, and judgment is entered to that effect. The amount of recovery will be determined pursuant to Eule 47(c) (2). 
      
      This opinion incorporates, with certain changes in discussion and result with regard to promotional activities, the opinion prepared, at the direction of the court under Rule 57(a), by Trial Commissioner Mastín G. White.
     
      
       Section 3404 originally prescribed a tax rate of 5 per centum (53 Stat. 411), but tbe rate bad been increased to 10 per centum by the time that is involved in the present litigation (26 U.S.C. § 3404 (1946 Ed., Supp. V, and 1952 Ed.)).
     
      
       This language, quoted from the original 1939 Code (53 Stat. 417), had not been changed as of the time involved in the present litigation.
     
      
       The manufacturer’s excise tax on mechanical refrigerators was imposed by Section 3405 of the Internal Revenue Code of 1939, as amended.
     
      
      
         These and other financial data contained in the report were offered by the plaintiff and admitted in evidence subject to verification by the defendant in the event that subsequent proceedings under Rule 47 (c) (2) are necessary.
     
      
       Previously, Sylvania’s predecessor, the Colonial Corporation, had manufactured radio sets for a single customer, Sears Roebuck & Company, which sold the radio sets at retail under its own “Silvertone” brand name.
     
      
       If any expenditure under this plan did cover retail advertising, that portion should be taken into account along with the advertising aspects of the other plans.
     
      
       Sylvania originally claimed a refund on behalf of its Lighting Division, but no proof was offered at the trial in support of that phase of its claim.
     
      
       The Radio and Television Division also manufactured and sold phonographs. However, there is virtually no other information in the record respecting the phonograph phase of Sylvania’s business.
     
      
       In the trade, radios and televisions are in the category of “brown goods.”
     
      
       The statistical data in this table and in the other tables set out in subsequent findings were admitted in evidence subject to verification by the defendant in the event of subsequent proceedings under Rule 47 (c).
     
      
       At the outset of the cooperative advertising plan, and -while the Radio and Television Division’s advertising department was being organized, claims under the plan were submitted to and processed by Kenyon-Eekhardt (see finding 14(h)).
     
      
       This action involves only that portion of the amounts set out in the table which Sylvania itself provided. No portion of the amounts provided by Sylvania’s distributors has been previously claimed or is now being claimed in this action as an allowance or as a deduction from the sales price of Sylvania’s taxable products.
     
      
       The figures contained in this table show only the expenditures out of the amounts provided by the Radio and Television Division. The totals of the various categories were twice the amounts shown here, as distributors provided half the funds for the spring promotion plan.
     