2017 (10) TMI 1109 - AT - Central Excise

Valuation - deduction of cash discount - Held that - in appellant s own case M/s Kisan Irrigation Ltd. Versus Commissioner of Central Excise, Indore 2016 (1) TMI 696 - CESTAT NEW DELHI , the Tribunal after relying on the decision of the Apex Court in M/s Purolator India Ltd 2015 (8) TMI 1014 - SUPREME COURT held that such cash discount is eligible for deduction to arrive at dutiable transaction value. It is very clear that the Hon ble Supreme Court was also dealing with a case of cash discount which was denied for deduction by the Revenue on the ground that the same was not actually passed on to the customers. In the present case also, the denial of discount for abatement from transaction value is on that ground only. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Interpretation of cash discount for arriving at assessable value for central excise duty, application of precedent set by the Hon'ble Supreme Court, distinguishing between cases where cash discount is passed on to buyers and where it is not.

Analysis:
The three appeals before the Appellate Tribunal CESTAT NEW DELHI involved the appellants, engaged in manufacturing PVC pipes and sprinklers liable to central excise duty, claiming cash discounts on goods sold to dealers but not passing on the discount to buyers. The Revenue demanded differential duty by disallowing the claimed discount, which was confirmed by the original authority and upheld by the Commissioner (Appeals).

The counsel for the appellants argued that the impugned orders erred in distinguishing the decision of the Hon'ble Supreme Court in a specific case, where the Court ruled that cash discount not passed on to buyers must still be considered for assessing duty. The counsel cited previous cases where similar issues were decided in favor of the appellants. The Appellate Tribunal noted that in the appellants' own case, the Tribunal had held that such cash discounts are eligible for deduction to determine the dutiable transaction value, following the precedent set by the Hon'ble Supreme Court.

After hearing both sides and reviewing the records, the Appellate Tribunal found no infirmity in applying the Supreme Court's decision to the present case. The Tribunal emphasized that the denial of discount from the transaction value was based on the same grounds as in the Supreme Court case. Therefore, the impugned orders were deemed without merit and were set aside, with the appeals being allowed based on the settled legal position and the Tribunal's previous decision in line with the Supreme Court's precedent.

In conclusion, the Appellate Tribunal upheld the appellants' argument regarding the interpretation of cash discounts for central excise duty assessment, emphasizing the importance of following established legal precedents set by the Hon'ble Supreme Court. The decision highlighted the consistency in applying legal principles across similar cases and the necessity of considering all relevant factors when determining assessable values for duty calculation.