2024 (5) TMI 1049 - AT - Central Excise

Valuation - trade discount offered by the appellants to BEST, being a bulk buyer - additional consideration for sale of CNG - due to technical necessity of the product, the compressors or dispensers are to be installed at the premises of BEST for supply of CNG to their buses and outside vehicles or not - HELD THAT - The valuation provisions contained in section 4 of the Central Excise Act, 1944 was substituted by Finance Act, 2000, w.e.f. 01.07.2000. The said amended provisions have considered different transaction values for the price charged to different customers for assessment purpose, subject to the condition that such transactions are purely based on commercial consideration, buyer and seller are not related to each other and the price charged is the sole consideration for such sale at the time and place of delivery - no evidence is forthcoming that the discount offered by the appellants to BEST was in lieu of the infrastructural facilities extended to them. Hence, the transaction value should be considered as the price at which the CNG were supplied by the appellants to BEST and such price should be considered as the value for the purpose of assessment and discharge of central excise duty liability. The issue arising out of present dispute is no more open for any debate, in view of various orders passed by the Tribunal in the case of the appellants themselves for earlier period, holding that deduction of trade discount from assessable value is admissible on sale transactions - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE, MUMBAI-V VERSUS M/S MAHANAGAR GAS LTD. 2019 (9) TMI 746 - CESTAT MUMBAI where it was held that ' No investigation has been conducted by the revenue to establish the allegation that the discount offered by the respondent to BEST was in lieu of all infrastructural facilities extended by BEST to the respondent.' There are no merits in the impugned order, insofar as it has upheld confirmation of the adjudged demands on the appellants - appeal allowed.

Summary

Issues involved: The judgment involves the consideration of whether the trade discount offered by the appellants to a bulk buyer can be treated as additional consideration for the sale of Compressed Natural Gas (CNG) in a situation where the compressors or dispensers are installed at the buyer's premises for supplying CNG.

Summary:
1. The appellants had a contract with a buyer for the supply of CNG through compressors/dispensers installed at the buyer's premises. The Department alleged that the trade discount offered by the appellants was additional consideration received, leading to a central excise duty demand. The Commissioner (Appeals) upheld the duty demand, prompting the appellants to appeal to the Tribunal.

2. The Tribunal analyzed the transaction values and found that the price charged to the buyer was the sole consideration for the sale of CNG. It was established that the appellants did not receive anything beyond the agreed price and were not related to the buyer. The transaction value was deemed the appropriate value for central excise duty assessment.

3. Previous orders by the Tribunal supported the deduction of trade discounts from the assessable value in similar cases involving the appellants. The Tribunal dismissed Revenue's contentions regarding additional consideration received for facilities provided by the buyer, as the evidence did not support such claims.

4. The Tribunal noted that the issue had been settled in previous orders involving the same parties, with the Supreme Court dismissing Revenue's appeal. Consequently, the Tribunal set aside the impugned order confirming the duty demands and allowed the appeal in favor of the appellants.