2018 (6) TMI 1345 - AT - Central Excise

Principles of Natural Justice - case of appellant is that the impugned order has been passed without considering the material facts and evidence on record - allowability of turn over tax, prompt payment discount and quantity discount while finalizing the provisional assessment - Held that - As per the settled law the appellants are entitled to prompt payment discount, quantity discount and turn over tax provided the discounts are known to the customers before the clearance of the goods and secondly there are sufficient documents to show that the discounts have been passed on to the customers. The learned counsel submitted that on account of fire most of the documentary evidences have been destroyed but from other sources and other records, they may prove these abatements and turn over tax if the matter is remanded to the original authority - the matter remanded for reconsideration - appeal allowed by way of remand.

Summary

Issues:
- Appeal against rejection of appellant's claim for deductions related to secondary packing, transportation, turn over tax, quantity & prompt payment discount.
- Disallowance of deductions by Assistant Commissioner and Commissioner(Appeals).
- Appellant's argument of passing on discounts to customers and destruction of documentary evidence.
- Violation of principles of natural justice in passing ex parte order.
- Dispute regarding eligibility of appellant to claim abatements like turn over tax, prompt payment discount, and quantity discount.
- Consideration of settled law on entitlement to discounts and sufficient evidence of passing on discounts to customers.
- Need for remand to original authority for considering documentary evidence and previous orders in favor of appellant.

Analysis:
The case involves an appeal against the rejection of the appellant's claim for deductions related to various expenses incurred during the clearance of refrigerators and refrigerator spares. The Assistant Commissioner and Commissioner(Appeals) disallowed certain deductions, leading to the appellant's appeal. The appellant argued that the impugned order was passed ex parte without considering material facts and evidence, violating natural justice principles. They contended that they were eligible to claim abatements like turn over tax, prompt payment discount, and quantity discount, as evidenced by previous Orders-in-Original. The appellant highlighted the necessity of producing documentary evidence to support their claims, especially after a fire incident destroyed most of their records.

The learned counsel for the appellant emphasized that the appellant had disclosed copies of credit notes and challans as evidence of passing on discounts and payment of turn over tax. However, the Commissioner(Appeals) did not consider this evidence, leading to the appeal. The appellate tribunal, after hearing both sides and examining the records, acknowledged the appellant's entitlement to discounts and abatements if supported by sufficient evidence of passing on these benefits to customers. The tribunal noted that the documentary evidence, though partially produced, was crucial for justifying the deductions claimed. Considering the destruction of records due to the fire incident, the tribunal decided to remand the matter to the original authority for a fresh adjudication, allowing the appellant to produce additional documents to support their claims.

In conclusion, the tribunal allowed the appeal by way of remand, emphasizing the importance of following the principles of natural justice in the fresh adjudication process. The decision highlighted the necessity of documentary evidence to substantiate claims for deductions related to discounts and abatements, ensuring a fair consideration of the appellant's case based on legal principles and previous favorable orders.