2011 (9) TMI 872 - AT - Central Excise

Deduction on account of trade discount, quantity discount, distribution expenses, turnover tax, interest on receivables, breakages in their price declaration - Held that - in the respondents own case 2011 (4) TMI 544 - CESTAT, MUMBAI , for the earlier period, the Tribunal has allowed the claim of the respondents for free replacement of breakages and the said order has been accepted by the Department - in respondents own case, the issue has been decided in favour of the respondents and the same has been accepted by the Department. Therefore, the principles of res judicata is applicable and it is no doubt that after the decision in the case of M/s. Surya Roshni (2000 (9) TMI 71 - SUPREME COURT OF INDIA) the respondents are not entitled to deduction on account of free replacement of breakages. As the principles of res judicata is applicable in the case of the respondents - Decided against Revenue.

Issues:
- Claim of deduction on account of interest on receivables and free replacement of breakages
- Applicability of principles of res judicata
- Effect of retrospective judgments by the Hon'ble Apex Court

Analysis:
1. Claim of Deduction on Interest on Receivables and Free Replacement of Breakages:
The respondents claimed deductions for various expenses in their price declaration filed with the department. The adjudicating authority initially denied the claim of interest on receivables and free replacement of breakages. However, the lower appellate authority later allowed both claims. The Revenue, being dissatisfied with this decision, filed an appeal challenging the order.

2. Applicability of Principles of Res Judicata:
The ld. C.A. appearing for the respondents argued that in the respondents' own case for an earlier period, the Tribunal had already allowed the claim for free replacement of breakages, and this order was not contested by the department. Therefore, he contended that the principles of res judicata should apply until the decision of the Hon'ble Apex Court in the case of M/s. Surya Roshni and M/s. Vikram Detergent Ltd.

3. Effect of Retrospective Judgments by the Hon'ble Apex Court:
The ld. SDR for the Revenue relied on the decisions of the Hon'ble Apex Court in the cases of M/s. Surya Roshni Ltd. and M/s. Vikram Detergent Ltd., arguing that these decisions had a retrospective effect. He contended that the impugned order allowing the claim of free replacement of breakages should be set aside based on the retrospective effect of these judgments. However, the respondents argued that the decision in their own case had been accepted by the Department, and thus the principles of res judicata should prevail.

4. Judgment:
After hearing both sides, the Tribunal noted that in the respondents' own case for an earlier period, the Tribunal had allowed the claim for free replacement of breakages, which was accepted by the Department. Despite the retrospective effect of the Hon'ble Apex Court's decision in the case of M/s. Surya Roshni, the Tribunal held that the principles of res judicata applied in this case. As the issue had already been decided in favor of the respondents and accepted by the Department, the Tribunal upheld the impugned order allowing the claim of free replacement of breakages. The Tribunal dismissed the Revenue's appeal, citing the applicability of res judicata and the acceptance of the previous decision in the respondents' own case.

5. Conclusion:
The Tribunal's decision emphasized the importance of respecting previous decisions and applying the principles of res judicata in cases where issues have already been settled. Despite the retrospective effect of certain judgments, the Tribunal upheld the impugned order based on the acceptance of the previous decision in the respondents' case. This judgment serves as a reminder of the significance of consistency and adherence to legal principles in tax matters.

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