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TMI Blog1991 (2) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Bombay Tyres International [1983 (14) E.L.T. 1896, 1984 (17) E.L.T. 329], Godfrey Philips India Ltd. [1985 (22) E.L.T. 306], Moped India Ltd. [1986 (23) E.L.T. 8] as also any other decision given or to be given by the Supreme Court. The Asstt. Collector thereafter adjudicated the matter, allowing only the abatement of the difference between the prices in the Price List effective from 1-10-1975 and those in the D.G.S. & D. contract rates but rejected all other claims of abatement in respect of sales, departmental expenses, administrative expenses, secondary packing, commissions to selling agents, turnover bonus [quantity discount, special discount and cash discount]. He, however, allowed the deduction of equalised freight. 3. Aggrieved by the said order, the appellants preferred an appeal before the Collector (Appeals). He allowed the abatements of cost of wooden crates, hoops and nails used for packing the products (files) as also special discounts, rebates and rate rebates as per the agreed terms of sales, Regional Discount, Festival Discount and Cash Discounts but rejected the appeal in respect of turnover bonus and commission to the selling agents. The appellants then pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Collector's findings are based on good evidence and law. He referred to the copies of certain documents filed before us at the time of hearing and submitted that from these documents it is clear that the bonus was given at the year end only. Therefore, what was given was only an incentive and not a bonus. The result was, according to the ld. Representative, that at the time and place of removal, the bonus was not paid. He referred .to the judgment of the Tribunal in R.R. Paints [1987 (28) E.L.T. 478 (Tribunal)] and submitted that in the said judgment, the Tribunal held against the admissibility of turnover discount. The Ld. Representative emphasised that the Department gave full opportunity to the appellants to prove by evidence that the turnover bonus was allowed as a matter of policy but the appellants did not succeed in proving to the Department, with acceptable documentary evidence, that grant of turnover bonus was their policy and that this policy was known to all their customers. He vehemently submitted that the sales policy document was never disclosed to the Department prior to 1982-83 and therefore, the appellants did not discharge the onus of proof on them. In so fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. CCE, Patna [i988 (37) E.L.T. 452 (Tribunal)] Shiva Glass Works v. CCE [1989 (41) E.L.T. 376 (SC)] and submitted that the deduction of the value of the wooden boxes etc. should not have been allowed. On the point of discounts, the ld. Representative argued that the Respondent Company did not declare the grant of the various types of discounts and referring to the grounds of appeal submitted that from the records made available to the Central Excise Officers, it was not ascertainable that the terms of sales were such that the various types of discounts and rebates were allowable to the buyers. He also submitted that from the verification report duty certified by a Chartered Accountant, it was culled that all types of discounts were allowed at a time in only four cases. Therefore, all customers were not allowed all the discounts with the result that such discounts would be inadmissible. He emphasised that the appellants never placed material to show that there was prior knowledge on the part of buyers about these discounts. He also argued that the Collector (Appeals) did not meet the findings recorded by the Asstt. Collector in the Order (Original) and emphasised that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where sales were made by the appellants to their agents on a principal to principal basis, the discounts should be allowed as in these transactions the agents did not act as agents but did so as dealers. Admittedly, this point was not raised before the authorities but in view of our findings which will follow and in view of the availability of the necessary documentary evidence, we feel that the interests of justice call for a consideration on this point. In our opinion, there should be no legal objection to granting the discounts in respect of sales to appellants' agents if it is conclusively proved that the sales were made on a principal to principal basis. We further observe that it was only because the margins allowed to the agents were considered as commissions, the deductions were disallowed. Where the appellants do not retain the title to the goods and actually sell them, be it to Commission Agents discounts, should be admissible. We have noted the ld. advocate's argument that it is the real substance of the transaction that matters and not the nomenclature given to a particular type of discount. This was the view of the Supreme Court in Moped India (supra). The ld. advo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Asstt. Collector who should then, after examining the documents, hearing the appellants and judging the facts, pass a fresh order in this regard. We, therefore, set aside the impugned order in so far as it relates to turnover bonus and direct that the matter be examined afresh by the Asstt. Collector before whom the appellants should place their submissions and the documents and explain the matter and the factual position to the satisfaction of the said Officer. If the Asstt. Collector, after examination of the arguments and evidence, comes to the conclusion that the grant of turnover bonus was known to the dealers before or at the time of clearance and not at the end of the year, the plea of the appellants can be examined as it would be different from the circumstances prevailing in M.R.F. case. The Asstt. Collector may then grant whatever relief follows. 16. The two appeals filed by the company/appellants are disposed of accordingly. 17. Coming to the appeals filed by Revenue, we note that they want the impugned order set aside in respect of allowing the cost of wooden crates, hoops and nails and grant of various types of deductions. 18. In so far as packing is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with appreciation the detailed and very balanced way in which the Asstt. Collector examined the issues with reference to facts and the legal position. However, he failed only in one regard, viz., that while he considered the position vis-a-vis the wholesale market, he over-looked the question whether the packing was necessary to place the goods in the wholesale market at the factory gate. Though he took note of the legal position, he judged on the basis of: i) The appellants selling all goods in wooden crates and, ii) Charging for them. He did not consider whether if sales were made at factory gate such wooden boxes would be necessary. This was the test applied by Supreme Court in Godfrey Philips (supra). The ratio of this and the various judgments of the Supreme Court wherein the question of packing was examined, always was that packing as necessary at the factory gate to be placed in wholesale market existing there, is the packing whose value was to be included. It is in this context that the ld. advocate's argument that the steel files are very heavy and have sharp edges, have to be protected, assumes significance. This factual position was, quite correctly, not denied. Steel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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