2020 (7) TMI 484 - AT - Central Excise

Valuation - deductions in nature of discounts - manufacture of tyres under the brand name CEAT on job work basis - Rule 10A(ii) of Central Excise (Determination of price of excisable goods) Rules 2000 - HELD THAT - The issue is no more res integra and is decided in their own case, in another period, COMMISSIONER OF CENTRAL TAX MEDCHAL GST VERSUS ACE TYRES LTD., UNIT II, EXEL RUBBER LTD. 2019 (11) TMI 377 - CESTAT HYDERABAD , this issue came up before this tribunal and this tribunal has held that the learned Commissioner (Appeals) has correctly assessed the goods and appellants are entitled for discounts as claimed - there are no infirmity in the order. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against finalization of provisional assessment order disallowing deductions on discounts given by principal manufacturer.

Analysis:
The case involved an appeal by the revenue challenging the setting aside of a finalization of a provisional assessment order by the Commissioner. The respondents, manufacturers of tyres under a specific brand name on a job work basis, sought provisional assessment due to unknown prices of goods at the time of clearance. The original authority disallowed deductions claimed on discounts given to buyers, leading to a duty demand. The Commissioner (Appeals) allowed the deductions, prompting the revenue to appeal. The revenue argued that necessary evidence was lacking to prove discounts were passed on to buyers. However, the tribunal noted that the original authority and the Commissioner had verified documents and concluded that discounts were passed on. The tribunal upheld the Commissioner's decision, citing the admissibility of discounts and quantification based on an equalization formula. The tribunal found no issues with the Commissioner's order and dismissed the revenue's appeal.

The tribunal referred to a previous decision in the appellant's case where a similar issue was decided in favor of the appellants, strengthening the argument for allowing the discounts claimed. The tribunal highlighted the thorough verification of documents by the original authority and the Assistant Director of Cost, supporting the conclusion that discounts were indeed passed on to buyers. The tribunal emphasized that the main dispute was regarding the quantification of discounts, which the Commissioner had appropriately addressed using a Cost Accountant certificate and an equalization formula. The tribunal agreed with the Commissioner's decision and found no reason to interfere, ultimately dismissing the revenue's appeal and disposing of cross objections.

In summary, the tribunal upheld the Commissioner's decision to allow deductions on discounts claimed by the appellants, emphasizing the verification of documents and the admissibility of discounts passed on to buyers. The tribunal found no errors in the Commissioner's order and dismissed the revenue's appeal, citing a previous decision in the appellant's favor and the appropriate quantification of discounts using an equalization formula.