2011 (1) TMI 594 - AT - Central Excise

Claim of deduction of discount given to the dealer - the appellants contended that such deductions are permissible under new valuation rules as per the circulars issued by Board - Commissioner agreed on the said legal issue, but confirmed the demand on the ground that such deductions are available only when discounts are actually passed on to the customers - As such, he held that in as much as there is nothing to show that the discounts were actually passed on to the customers, the demand is required to be confirmed. Insurance recovered from their customers - . Learned advocate fairly agree that the issue of insurance was also subject matter of appeal in the appellant s own case in the earlier order and Tribunal vide Order No.A/1624-1626/WZB/AHD/07, dt.10.7.04, has rejected their appeal.

Summary

Issues:
1. Confirmation of duty and penalty against the appellant by Commissioner on the grounds of rejecting deduction claim for dealer discount.
2. Confirmation of duty against the appellant for insurance recovered from customers.
3. Lack of opportunity for the appellant to present submissions on whether discounts were passed on to the dealer.
4. Discrepancies in Tribunal orders regarding insurance and discount deductions for the appellant.

Analysis:

1. The judgment addresses the confirmation of duty and penalty against the appellant, based on the rejection of the deduction claim for dealer discount. The Commissioner confirmed the duty, stating that discounts must be actually passed on to customers for deductions to be permissible. The appellant contended that the show cause notice focused on a legal issue, not factual aspects, and they were not given an opportunity to present evidence regarding the passing on of discounts to the dealer.

2. Additionally, the duty was confirmed against the appellant for insurance recovered from customers, which was not spent on insurance. The appellant's advocate acknowledged that this issue was previously considered in the appellant's case, where the appeal was initially rejected but later allowed by the Tribunal, emphasizing a distinction in factual positions. The appellant argued that the facts considered in the subsequent Tribunal decision should be relevant for the current appeal.

3. The judgment highlights the existence of two conflicting Tribunal orders concerning the appellant, with one in their favor and one against them. The subsequent order considered the earlier rejection but differentiated based on factual nuances, underscoring the importance of the factual context in the case.

4. Consequently, the Tribunal set aside the impugned order and remanded the case to the original adjudicating authority for a fresh adjudication. The directive was to consider detailed facts and take into account the subsequent Tribunal decision that favored the appellant, emphasizing the significance of factual clarity in resolving the issues at hand.