2000 (3) TMI 290 - AT - Central Excise

Summary

Issues:
1. Assessment of excise duty on goods sold by M/s. Onida Savak Ltd. to M/s. Adonis India Ltd.
2. Validity of the Commissioner's approach in fixing the value of goods for excise duty assessment.
3. Application of trade and cash discounts in determining assessable value.
4. Compliance with Supreme Court ruling on deducting discounts for excise duty calculation.
5. Impact of discounts offered by M/s. Adonis India Ltd. on differential duty payable.
6. Penalties imposed and their justification.
7. Remand of the matter for a fresh decision on the computation of the duty payable.

Analysis:

1. The case involved M/s. Onida Savak Ltd. and M/s. Adonis India Ltd., where the former changed its marketing pattern by selling goods to the latter, leading to a demand for differential duty due to alleged intent to evade payment.

2. The appellants challenged the Commissioner's decision to use the value declared by M/s. Adonis India Ltd. for assessing duty, arguing that trade and cash discounts should have been deducted from the assessable value.

3. The Tribunal referred to a Supreme Court ruling emphasizing the deduction of discounts to determine the assessable value for excise duty calculation, urging compliance with this legal principle.

4. Following a directive to verify discounts offered by M/s. Adonis India Ltd., it was confirmed that cash and trade discounts were indeed provided, impacting the assessable value for duty calculation.

5. The Tribunal highlighted the necessity of deducting discounts from the sale price to ascertain the correct assessable value, emphasizing that even if some dealers did not avail discounts, they should still be deducted.

6. Given the incorrect application of law and consideration of facts, the Tribunal set aside the penalties imposed and remanded the matter for a fresh decision on the computation of the duty payable.

7. The Tribunal instructed the Commissioner to reevaluate the duty payable, ensuring adherence to legal principles and providing a reasonable opportunity for the appellants to present their case, with a deadline of three months for completion.