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Issues:
1. Whether the petitioner was entitled to a deduction of discount on Central Excise duty? 2. Was the discount offered by the petitioner considered uniform? 3. Is the recovery of short-levy permissible under Rule 10 or Rule 10A of the Central Excise Rules? Analysis: 1. The petitioner, a glass manufacturer, claimed a deduction of discount on Central Excise duty based on specific terms offered to customers in Uttar Pradesh and outside. The duty was calculated after deducting the discount. The petitioner contended that the discount offered was uniform, thus challenging the additional levy imposed by the Central Excise Inspector. 2. The Court observed that the discount scheme was not uniform as required for a concession of deduction. While customers in Uttar Pradesh were given a 6.4% discount for sales above Rs. 200, customers outside Uttar Pradesh received the same discount for sales above Rs. 500. Although there was uniformity within each customer category, there was a lack of uniformity between customers in and outside Uttar Pradesh, making the petitioner ineligible for the deduction. 3. Regarding the recovery of short-levy, the Court noted that Rule 10 of the Central Excise Rules allows for the recovery of short levy within three months of duty payment in cases of collusion or misconstruction. The petitioner had paid the duty in 1962 and 1963, and the demand notice was issued in 1966, exceeding the time limit under Rule 10. The Central Government Counsel argued for recovery under Rule 10A, a residuary power applicable when specific provisions are absent. However, since Rule 10 covered the circumstances in this case, the recovery should have been made within three months, rendering the demand notice illegal. In conclusion, the Court quashed the demand notice against the petitioner, ruling that the recovery of short-levy under Rule 10 was time-barred, and the petitioner was not entitled to the discount deduction due to the lack of uniformity in the discount scheme.
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