2011 (1) TMI 230 - AT - Central Excise

Valuation - normal value - Abatement - Revenue in appeal against extension of abatement on interest on receivables and extension of distributors discount to non-distributors Revenue contended that the claim for deduction of interest on receivables is not admissible in law - discount is not admissible to non-distributors for the reason that with the amendment of Section 4 from 28.9.1996 providing for each sale price to be the normal price for the purposes of assessment and for the reason that the discount was not disclosed to the Department during the material time, the extension of such discount to non-distributors is contrary to law - order extending abatement on interest on receivables and extending distributors discount to non-discount Appeal allowed

Summary

Issues:
1. Claim of abatements on post-manufacturing expenses for excise duty assessment.
2. Disallowance of abatements on interest on receivables, octroi, free supplies, and distributors discount.
3. Appeal against the Commissioner (Appeals) order allowing abatements.

Analysis:
The case involves registered manufacturers of lubricating oil and lube preparations claiming abatements on post-manufacturing expenses for excise duty assessment and opting for provisional assessment under Rule 9B of the Central Excise Rules, 1944. A show-cause notice was issued to disallow abatements claimed on interest on receivables, octroi, free supplies, and distributors discount. The adjudicating authority disallowed all abatements, leading to an appeal before the Commissioner (Appeals), who allowed the abatements and set aside the adjudication order, prompting an appeal by the Revenue.

The Revenue appealed against the extension of abatement on interest on receivables and distributors discount to non-distributors. The Tribunal referred to a previous order holding that deduction of interest on receivables from the sale price for determining the assessable value is not admissible. Following this precedent, the Tribunal agreed with the Revenue that the claim for deduction of interest on receivables is not permissible. Regarding the extension of distributors discount to non-distributors, the Tribunal concurred with the Revenue that such extension is not allowed due to amendments in Section 4 and non-disclosure of the discount to the Department during the relevant period. Consequently, the Tribunal set aside the order extending abatements on interest on receivables and distributors discount to non-distributors, allowing the Revenue's appeal.