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TMI Blog1992 (10) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in the manufacture of Synthetic Detergent Powder. They entered to an agreement with M/s. Index Port Ltd. (I.E.L. in short) (wholly owned subsidiary of M/s. Hindustan Lever Ltd.) under which they produce and manufacture "wheel" detergent powder for and on behalf of Index Port Ltd., Bombay. IEL supplies all raw-materials including packaging material such as polythene pouches and HDPE bags and the appellants receive and hold all such material on behalf of IEL, carry out processing of these raw-materials into finished products as per the instructions of IEL, and pack the detergent powder under the brand name "wheel" belonging to IEL. The detergent powder is packed in retail pack size of 1 Kg. polythene pouches and 50 number of such polyth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. On receipt of reply, the Asstt. Collector approved the price list by disallowing the deductions claimed by the appellants. However, the Assistant Collector allowed freight, turn-over tax and Central Excise duty. On appeal the Collector confirmed the order of the Assistant Collector. Hence the appeal before us. 4. The main contention of Shri Lodha, Advocate for the appellants is that the eligibility for the deduction of handling expenses, remuneration paid to the Clearing Agents and discount on damages is covered by an order of the Tribunal in Tungbhadra Industries Ltd. v. Collector of Central Excise, 1992 (60) E.L.T. 512. Therefore, following the said order, the appellant is entitled to these deductions. As regards, eligibility fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Gulshan Roy wherein they have stated that "in addition to the above, the manufacturers with a view to promote sales, also announced from time to time schemes whereunder the wholesale dealers are offered some stocks free by way of quantity discount for sales beyond agreed limits. Such schemes are communicated to wholesale dealer from time to time by the salesman of the manufacturers and agreed the stocks are made available to wholesale dealers once purchases are made in excess of agreed limits. It is common practice in the trade and wholesale dealers take it and understand this as quantity discount". The next item of discount claimed by the appellants relates to trade discount. In reply to the show cause notice, the appellants have stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods on their behalf. The raw-material was supplied by Index Port Ltd. M/s. Tungbhadra Ind. Ltd. sold the goods to Index Port who in turn sold the goods to wholesale market. The assessable value claimed in the price list the price at which M/s. Index Port Ltd. sold the goods in wholesale market. While doing so, they have claimed deductions in respect of freight, handling expenses incurred in the movement of finished goods to wholesaler, remuneration to Clearing and Forwarding Agents, discount for damages. This Tribunal on a consideration of the material allowed deductions in respect of all the items. 9. The facts of the present case are exactly similar to Tungbhadra Ind. Ltd. Therefore, following order in Tungbhadra Ind. we allow the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down by the Supreme Court in K. Radha Krishaiah (supra). Therefore, the HDPE bags bring durable and returnable/ the cost of the bags is not includible in the assessable value. 11. The next item of deduction is the interest on receivables. In other words, it is interest charged for a delayed payment made by the customers. In this context, we may refer the observation by the Supreme Court in A.K. Roy v. Voltas Ltd. 1977 (1) E.L.T. (J 177). It was held that "the section postulates that the wholesale price should be taken on the basis of cash payment thus eliminated the interest involved in wholesale price which gives credit to the wholesale buyer for a period of time and that the price has to be fixed for a delivery at the factory gate ..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n at or prior to the removal of goods. Such trade discount shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price. 13. In other words, a trade discount by whatever name is described is eligible for deduction provided it is known either under agreement or under terms of sale or by established practice prior to the removal of goods. On the facts of this case, there is no evidence except the affidavits filed by two persons which we do not know whether they are before the lower authorities. Though in the reply to the show cause notice, the appellants have stated that they have issued circulars indicating payment of trade discount and quantity discount. Neither those circulars we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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