2004 (9) TMI 538

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..... cts to the dealers at a discount ranging from 20% to 25%. As regards of dealers in the Metropolitan City of Mumbai and the State of Kerala, the goods were sold at a discount of 16.88% or 19.38%. As per the agreement entered into by the appellants with M/s. Mehta Trading Company, Mumbai (hereinafter referred to as M/s. MTC), the appellants allowed the discount of 33.5% to M/s. MTC which is much more than normal trade discount allowed to the other dealers. M/s. MTC were also appointed as Authorized Stockists. The Department took a view that the additional discount allowed to M/s. MTC is only a commission for services rendered by M/s. MTC for promotion of sales of their products and therefore, the same is liable to be included in the assessabl .....

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..... annot be alleged and proviso to Section 11A cannot be invoked. 4. Ld. SDR pointed out that M/s. MTC contended that the transaction between the appellants and M/s. MTC is not at arms length and extra discount allowed to them is only a commission for the service rendered by M/s. MTC for promotion of the sale of their products. Hence it was urged that the additional discount should be added to the assessable value claimed by the appellants for determining the correct duty liability. 5. We have heard the rival contentions. From the records, it is seen that the appellants have appointed M/s. MTC, Mumbai as their Authorized Stockists. In respect of the orders booked by M/s. MTC, the supplies were made directly from the appellants to the buyer .....

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..... s per their agreement between the appellants and M/s. MTC, the latter had certain obligations to promote the sales of the products of the appellants. In view of this, under the agreement, they were allowed higher discount than allowable for other dealers. On this account one cannot come to a conclusion that a transaction between the appellants and M/s. MTC is not on principal to principal basis. Moreover, under the new Section 4 effective from 1-7-2000, the value for assessable purpose is the transaction value. There is no specific provision in the new law in respect of trade discount. The transaction value is arrived at after deducting the discount allowed from the lists of price. In this case, the Department has not shown that the appella .....

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