1997 (3) TMI 98 - SC - Central Excise

Summary

Issues involved:
The issues involved in this judgment are the deductibility of turnover discount and additional discount.

Deductibility of Turnover Discount:
The Supreme Court held that the turnover discount is to be allowed based on the judgment in Government of India v. Madras Rubber Factory Ltd. The turnover discount is provided as an incentive for dealers to increase their volume of goods purchased. The rate of discount increases with higher purchase volumes, and it is given ad hoc based on the previous year's performance. The discount is adjusted at the end of the year, and any refund made by the dealer is to be added back to the assessable value of the goods for duty payment. The Court found that the turnover discount is a well-accepted normal practice in the trade and is an admissible deduction.

Additional Discount:
Regarding the additional discount, the Court directed that the matters be sent back to the Assistant Commissioner to determine the nature and character of the discount and its deductibility according to law. The Court did not provide a final decision on the additional discount issue and left it for further assessment by the Assistant Commissioner.

In conclusion, the appeals were allowed in part, with the turnover discount being deemed as an admissible deduction. The matters were remitted to the Assistant Commissioner for appropriate orders in accordance with the law. No costs were awarded in this judgment.