2016 (10) TMI 79 - AT - Central Excise

Valuation - deduction of discount - discount was given to non-performing dealers also - turnover discount was quantified at the end of calendar year wherein dealer has sold the cars of previous year - discount was made known to dealers in advance - Held that - the impugned order is not sustainable in respect of all the three points; as regards of extending the discount to non performing dealers the denial of deduction of such discount from the assessable value seems to be incorrect as there is no reason for disallowing the same. It is an admitted fact that the discount is extended to non performing dealers also and that it has been passed on. We agree with the appellant that by extending such discount it will encourage the dealers to work more efficiently and get orders for cars which will benefit the dealers as well as the appellant. Adjustment of excess payment of duty to short payment of duty on the finalisation of provisional assessment - unjust enrichment - Held that - in the appellant s own case as reported at 2014 (12) TMI 158 - CESTAT MUMBAI the Tribunal has held that the discount which are extended by credit notes are also eligible for deduction. Also the same view has taken by Hon ble High Court of Karnataka in the case of Toyota Kirloskar Auto Parts Pvt. Ltd. Vs. CCE LTU Bangalore 2011 (10) TMI 201 - KARNATAKA HIGH COURT which was followed by the Principal Bench of Tribunal in the case of CCE Vs BSL Ltd. 2014 (9) TMI 771 - CESTAT NEW DELHI . Therefore in view of the authoritative jurisdictional pronouncement we have to hold that the excess payment of duty to the short payment of duty on finalisation of provisional assessment is to be allowed. Duty liability - turnover discount extended - Held that - it is seen from circular of appellant that this turnover discount specifically states that the said discount is available to all the dealers beginning on the first day of calendar year and ends on the last day of such calendar year. Only reason given by the lower authorities for rejecting the contention that the dealer has not sold the cars manufactured and cleared to him by the appellant of the same calendar year. We find no merits in this argument as the turnover discount is an advancely intimated discount without any qualification as to which cars are to be sold to be eligible for Turnover Discount; the circular only states that to be eligible for Turnover Discount specific number of cars need to be sold in a calendar year. In such a factual position we are of the view that the deduction claimed by the appellant on the turnover discount is legitimate and needs to be extended to him. We agree with the appellant that the issue is now squarely covered by the decision of Tribunal in the various cases. Therefore in view of the authoritative jurisdictional pronouncement we hold that the impugned orders are not sustainable and liable to be set aside. - Decided in favour of appellant

Summary

Issues involved:
- Provisional assessment of turnover discount
- Denial of adjustment of excess duty paid to short payment of duty
- Extending discount to non-performing dealers

Detailed analysis:
1. Provisional assessment of turnover discount:
The appeals were against the Orders-in-Appeal passed by the Commissioner of Central Excise, Pune-I. The issue revolved around the appellant clearing motor vehicles to dealers at fixed rates with quantity discounts based on turnover. The turnover discount was determined at the end of the calendar year. The appellant argued that the turnover discount was known to dealers in advance and was passed on to them. The lower authorities rejected the claim, citing that the turnover discount was quantified at the end of the year when the dealers sold cars from the previous year. The appellant relied on various case laws to support their claim. The Tribunal found that the turnover discount was advancely intimated without any qualification on which cars needed to be sold, making the deduction legitimate. The impugned orders were set aside, and the appeals were allowed.

2. Denial of adjustment of excess duty paid to short payment of duty:
The issue involved the denial of adjusting excess duty paid to short payment of duty upon finalization of provisional assessment. The appellant argued that the excess payment and short payment should be adjusted when provisional assessments are finalized. The Departmental Representative contended that the duty burden had already passed to the customer, and adjustments were not permissible. The Tribunal referred to relevant legal provisions and case laws to support the appellant's position. It was held that the excess payment of duty to short payment on finalization of provisional assessment should be allowed. The impugned orders were set aside, and the appeals were allowed.

3. Extending discount to non-performing dealers:
The issue centered around extending discounts to non-performing dealers. The Departmental Representative argued against extending discounts to non-performing dealers, citing various case laws. The Tribunal found no reason to disallow extending discounts to non-performing dealers, as it encouraged better performance and benefited both dealers and the appellant. The impugned orders were found unsustainable on this point, and the appeals were allowed.