2005 (6) TMI 459 - AT - Central Excise

Summary

Issues:
1. Rejection of plea for special discounts under Advance Booking Scheme.
2. Eligibility of discounts under the Advance Booking Scheme.
3. Contention of unjust enrichment.
4. Applicability of Board's Circulars and judicial precedents.
5. Levying of penalty.

Issue 1: Rejection of plea for special discounts under Advance Booking Scheme
The appeal arose from the rejection of the assessees' plea for granting special discounts to a separate class of buyers under the Advance Booking Scheme. The Commissioner confirmed the discounts given to a special class of buyers for a specific period, involving a differential duty. The penalty imposed was also addressed in the order.

Issue 2: Eligibility of discounts under the Advance Booking Scheme
The appellants, manufacturers of Hermetically Sealed Compressors, implemented an Advance Booking Scheme during lean seasons. The scheme offered discounts to dealers who booked compressors in advance, with the discount communicated through Office Orders and to the Central Excise department. The appellants contended that they were entitled to deduct the discounts even for dealers opting for the scheme, supported by Circulars and judicial rulings. They maintained separate accounts and paid duty on notional interest earned on advances, asserting their eligibility for the deductions.

Issue 3: Contention of unjust enrichment
The Revenue contested the matter on the grounds of unjust enrichment, challenging only this aspect before the Tribunal. However, the Tribunal rejected the plea of unjust enrichment, emphasizing the settled issue in favor of the appellants by a previous order that was not challenged by the Revenue.

Issue 4: Applicability of Board's Circulars and judicial precedents
The Tribunal accepted the contentions raised by the appellants, highlighting that they were paying duty on the value arrived at even under the Advance Booking Scheme. The Commissioner's order upholding the contention for deduction of discounts was deemed final, making the appellants eligible for the claimed discounts. The Tribunal relied on Board's Circulars and judicial precedents to support the deduction of discounts, considering them as special discounts granted to specific contracting parties.

Issue 5: Levying of penalty
The learned Counsel submitted that penalty was not leviable in the circumstances. The Tribunal found in favor of the appellants, setting aside the Commissioner's order as not legal and proper. The appeal was allowed with consequential relief, if any, indicating that the appellants were entitled to the discounts under the Advance Booking Scheme.