2017 (10) TMI 1221 - AT - Central Excise

Valuation - includibility - the cash discounts on the goods sold to the dealer from depot/branches directly from factory at the time of clearance of the said goods - Held that - an identical issue has come up before this Tribunal in the assessee-Appellants own case M/s Kisan Irrigation Ltd. Vs CCE, Indore 2016 (1) TMI 696 CESTAT, New Delhi , where it was held that As relying on Purolator India case 2015 (8) TMI 1014 - SUPREME COURT it is held that the appellants are entitled for claiming deduction of cash discount from the transaction value on the clearances made from the factory to all the customers - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of cash discounts claimed by assessee-Appellants in determining assessable value under Section 4 of the Central Excise Act, 1944.

Analysis:
The judgment by the Appellate Tribunal CESTAT New Delhi involved appeals by the assessee-Appellants against the Order-in-Appeal passed by the Commissioner (Appeals-I) Central Excise, Customs & Service Tax, Bhopal for the period 2010 to 2012. The assessee-Appellants, engaged in manufacturing irrigation system pipes, claimed cash discounts on goods sold to dealers directly from the factory at the time of clearance. The Department denied these discounts as deductions from all clearances to determine the assessable value. The Tribunal considered an identical issue from previous cases and followed the ratio laid down by the Hon'ble Supreme Court in the case of M/s Purolator India Ltd. Vs CCE, Delhi-III. The Supreme Court emphasized that under the new Section 4 of the Central Excise Act, the assessable value should be the transaction value, which is the price actually paid or payable for the goods when sold.

Regarding the cash discount issue, the Tribunal held that as no cash discount was actually given to customers, the actual price paid by them should be the assessable value. The Tribunal rejected the appeal concerning the allowance of deduction on cash discount. However, the matter of volume discount, sales tax, and duty liability in respect of returned goods was remanded to the Adjudicating Authority for re-adjudication. The Tribunal left the decision on the imposition of penalties to the Adjudicating Authority. Ultimately, the Tribunal set aside the impugned order and allowed the appeals filed by the assessee-Appellants. The appeals were allowed, following the Tribunal's earlier order, and the impugned order was set aside. The judgment was dictated and pronounced in open court by the President of the Tribunal.