2004 (10) TMI 212 - AT - Central Excise

Summary

Issues:
Refund claim of Central Excise duty rejected by Commissioner (Appeals) - Appellate Tribunal CESTAT, NEW DELHI judgment analysis.

Issue 1: Refund claim rejection
The appeal was filed against the rejection of the refund claim of Central Excise duty by M/s. SICPA India Ltd. The dispute arose from the discount rate applicable to the printing inks supplied to the Bank Note Press. The Appellants initially offered an 8% discount on a quantity of 1381 MTs, but the Bank Note Press only ordered 165 MTs. The Appellants agreed to a 0.8% discount on the initial order but later offered an 8% discount for the full quantity. The Assistant Commissioner rejected the refund claim, stating the 8% discount was not known at the time of removal. The Commissioner (Appeals) and Deputy Commissioner also rejected the claim, citing the Supreme Court's judgment in MRF Ltd. v. CCE. The Appellants argued that the discount was agreed upon before the removal of goods, as evidenced by correspondence and negotiations.

Issue 2: Legal considerations
The Tribunal considered the legal aspects, emphasizing that trade discounts are permissible deductions. The key dispute was the percentage of discount to be deducted - either 0.8% at the time of removal or 8% finalized after negotiation. The Tribunal reviewed the facts, noting that the Bank Note Press was aware of the 8% discount before goods removal. Citing precedents like Bombay Tyre International Ltd. case, the Tribunal held that trade discounts known at or prior to removal should be allowed as deductions. The Tribunal referenced decisions like Camphor & Allied Products and Shivalik Electric Co. Ltd., highlighting that parties can modify rates agreed upon in contracts. The Tribunal differentiated the present case from MRF Ltd. case where prices were reduced post-clearance due to a meeting between buyer and manufacturer, unlike the situation here. Consequently, the Tribunal ruled in favor of the Appellants, allowing the 8% discount deduction and refund of excess duty paid.

This detailed analysis of the judgment provides insights into the legal reasoning and application of relevant precedents in determining the outcome of the appeal regarding the refund claim of Central Excise duty.