2002 (2) TMI 486 - AT - Central Excise

Summary

Issues Involved:
Whether "No claim discount" is deductible from the assessable value of Central Excise goods manufactured by M/s. Stainless India Ltd.

Detailed Analysis:

Issue 1: Deductibility of "No claim discount" from assessable value

The appellant, M/s. Stainless India Ltd., contended that the discount given to their customers should be deductible from the wholesale price of the goods as per Section 4(4)(d)(ii) of the Central Excise Act. They argued that the discount was known to the buyers at the time of clearance of the goods and provided certificates from customers to support this claim. The appellant cited previous cases where undisclosed discounts did not affect the deduction from the assessable value. However, the Deputy Commissioner and the Commissioner (Appeals) rejected the refund claim and appeal, respectively, stating that the discount was not known to the buyers in advance and was not mentioned in the invoices.

Issue 2: Burden of proof on the Appellants

The Tribunal referred to the Supreme Court judgment in U.O.I. v. Bombay Tyre International P. Ltd., emphasizing that trade discounts should be known at or prior to the removal of goods. The onus was on the Appellants to prove that the discount was known to the customers before clearance. The Tribunal noted that the extract of minutes provided by the Appellants mentioned the discount but failed to show how it was communicated to customers. Additionally, the certificates from customers were deemed unreliable as they were identically worded and appeared to have been obtained by the Appellants. The Tribunal also highlighted a previous case where similar affidavits were discarded as being procured by the Assessee.

Conclusion:

The Tribunal held that the discount claimed by M/s. Stainless India Ltd. was not known to the customers at or prior to the removal of the goods, as required by law. Therefore, the appeal was rejected, affirming the decisions of the lower authorities. The judgment underscores the importance of providing clear evidence that discounts are known to buyers in advance to be deductible from the assessable value of Central Excise goods.