2011 (6) TMI 591 - AT - Central Excise

Transaction value - pressure cookers are assessable to excise duty on the basis of retail sale price as provided for under Section 4A of the Central Excise Act 1944 parts of pressure cookers are governed by Section 4 of the Central Excise Act 1944 and duty liability has to be discharged on the basis of transaction value - department felt that the said certificate arrived at the discounts on equalised basis and not on the basis of actual discounts passed on to the consumers or on actual taxes paid in respect of parts and pressure cookers respectively and therefore the discounts are not permissible Held that - discount is as a percentage of sale value for the purpose of arriving at the pro-rata discount they have taken the retail sale price of the goods sold which indicates that the discount which is actually claimed in respect of the parts is less than what they have actually passed on. They have also submitted sample invoices from where it can be seen that they are passing on these discounts to the buyers of the goods appeal is dismissed

Summary

Issues:
1. Departmental appeal against Order-in-Appeal rejecting deduction claims on pressure cookers and parts.
2. Allowability of discounts claimed by the assessee on pressure cookers and parts.
3. Verification of discounts by the assessing authority and relevance of supporting evidence.

Analysis:

Issue 1:
The department filed an appeal against the Order-in-Appeal rejecting deduction claims on pressure cookers and parts. The Commissioner (Appeals) upheld the order-in-original passed by the Assistant Commissioner of Central Excise. The department contended that the discounts claimed by the assessee were not permissible as they were based on an equalized basis, not reflecting actual discounts passed on to consumers or actual taxes paid. However, the Commissioner (Appeals) found no evidence to support this claim and stated that the expenses claimed for deduction were valid based on the Chartered Accountant's certificate provided by the assessee.

Issue 2:
The main issue revolved around the allowability of discounts claimed by the assessee on pressure cookers and parts. The assessee, M/s. Hawkins Cookers Limited, claimed deductions for various discounts, including dealer discounts and taxes. The department raised concerns about the validity of these discounts, arguing that they were not based on actual discounts passed on to buyers. The Commissioner (Appeals) upheld the validity of the discounts claimed by the assessee, noting that the Chartered Accountant's certificate supported the deductions made by the assessee. The discounts were allowed based on actual invoices and ledgers, and the assessing authority verified the discounts before finalizing the assessment.

Issue 3:
The assessing authority verified the discounts claimed by the assessee and found them to be valid based on actual transactions and invoices. The discounts were allowed in accordance with the provisions of the Central Excise Act, and the assessing authority followed the guidelines provided by the Supreme Court in relevant cases. The department's objections regarding the discounts were dismissed as the assessing authority confirmed that the discounts were passed on to buyers as claimed by the assessee. The appeal was dismissed due to lack of merit, as the discounts were found to be supported by evidence and verified by the assessing authority.

In conclusion, the judgment upheld the validity of the discounts claimed by the assessee on pressure cookers and parts, dismissing the department's appeal against the Order-in-Appeal. The assessing authority's verification of the discounts and the supporting evidence provided by the assessee were crucial in determining the allowability of the deductions claimed.