2017 (2) TMI 572 - AT - Central Excise

Whether disallowance of cash discount vide the impugned order is just and proper - Availment of partial exemption - Notification No. 5/2007 - Held that - in the remand Orders-in-Original No.54 56/2013/AC/Division-I/LKO dated 31/05/2013 the Assistant Commissioner have allowed the discounts as deductible pursuant to verification that the discounts in question have been passed on by the appellant to their buyers - Appeal allowed - decided in favor of the assessee.

Summary

Issues: Appeal against disallowance of discount post clearance.

Analysis:
1. Issue: Disallowance of discount post clearance.
- The appellant, a manufacturer of products containing fly ash, availed partial duty exemption under Notification No. 5/2007.
- Appellant cleared products through direct sales, sales via depots, and sales through consignment agents.
- Revenue found discrepancies in duty payment due to discounts extended to buyers and consignment agents.
- Appellant claimed discounts were passed on and accounted for in books.
- Revenue issued show cause notice for short payment of duty.
- Appeals before Commissioner (Appeals) were rejected, leading to the present appeal.

2. Judgment Analysis:
- Appellant argued that similar discounts were allowed for subsequent periods, and Commissioner (Appeals) upheld their deductibility.
- Assistant Commissioner allowed discounts as deductible post-verification.
- Department accepted Commissioner (Appeals) order post remand.
- Tribunal found issue settled in favor of appellant, allowing the appeal and setting aside impugned orders.
- Appellants entitled to consequential benefits as per law.

This judgment clarifies the treatment of discounts post-clearance for a manufacturer availing duty exemption. The Tribunal's decision in favor of the appellant emphasizes the importance of verifying and passing on discounts to buyers. The acceptance of similar discounts in subsequent periods and post-remand orders supporting the deductibility of discounts strengthen the appellant's case. The ruling provides clarity on duty payment adjustments related to discounts and highlights the significance of proper documentation and verification in such cases.