2011 (4) TMI 544 - AT - Central Excise

Deduction of account of free replacement of breakage - Held that in the facts and circumstances of this case the issue before us is that whether the impugned order holding that the respondent are entitled for claiming of deduction on account of replacement of breakage is entitled up to 12-9-2000 or not - Decided in favour of the assessee

Summary

Issues:
Revenue's appeal against the Commissioner (Appeals) decision allowing deduction on account of free replacement of breakage up to 12-9-2000.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai involved the Revenue challenging the Commissioner (Appeals) decision allowing the respondent's claim of deduction on various accounts in their price declaration filed with the department from April 1999 to March 2001. The adjudicating authority had initially allowed deductions on account of discount and interest on receivable up to 30-6-2000. Subsequently, the Commissioner (Appeals) allowed deductions on account of freight and free replacement of breakage up to 12-9-2000. The Revenue contested this decision specifically regarding the deduction on account of free replacement of breakage, citing judgments of the Supreme Court in the cases of CCE v. Vikram Detergent and CCE v. Surya Roshni. The Revenue argued that the decision in the case of Surya Roshni disallows free replacement of breakage and should be applied retrospectively. However, the respondent's representative contended that a previous Tribunal decision in the respondent's case had allowed the deduction for free replacement of breakage, which had not been challenged by the department. The respondent argued that the issue had attained finality in their case for the earlier period and should be upheld.

The Tribunal, after hearing both sides, considered the main issue of whether the respondent was entitled to claim a deduction on account of replacement of breakage up to 12-9-2000. The Tribunal noted the Revenue's argument that the Supreme Court's decision should have retrospective effect, as held by the Madras High Court in a relevant case. However, the Tribunal distinguished this case from the present one, emphasizing that there was a precedent decision in the respondent's own case allowing the deduction for replacement of breakage, which had been accepted by the department. Therefore, the Tribunal upheld the Commissioner (Appeals) decision, stating that the respondent was entitled to the deduction of this account until the Supreme Court's decision in the case of Surya Roshni. The Tribunal found no infirmity in the impugned order and rejected the Revenue's appeal.

In conclusion, the Appellate Tribunal CESTAT, Mumbai upheld the Commissioner (Appeals) decision allowing the respondent's claim of deduction on account of free replacement of breakage up to 12-9-2000, based on a previous Tribunal decision in the respondent's case and the absence of any challenge from the department. The Tribunal rejected the Revenue's appeal, stating that the respondent was entitled to the deduction until the Supreme Court's decision in the case of Surya Roshni.