9911796707
TMI Blog2012 (11) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... Pnuematics P. Ltd. are manufacturers of goods falling under Chapter 84 of the Schedule to the Central Excise Tariff Act. The appellant sold their products directly to customers as well as through different sales agents appointed for different localities. It was noticed that in some cases, invoices are made directly in the name of customers giving reference of the sales agents involved and in such cases commission is included in the sales amount recovered from the customers and duty is also paid on such commission. However, in some cases where sale is in the name of sales agent, the amount of commission which also includes after sales service charges for the after sales service provided by the selling agents is given to the sales agent direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egotiating the purchase/sale of the goods and the same are reflected in the invoices issued to the customers. The department has not disputed these discounts and has accepted the levy of duty on the net amount received by the appellant. However, in the case of sales agents, they are granting a higher discount of 20% which is being disputed by the department as being in the nature of commission and hence liable to be included in the assessable value of the goods sold. The ld. Counsel argues that the discounts are trade discounts reflected in the invoice issued to the sales agents. The ld. Counsel submits that the transaction value in these cases is the amount received by the appellant net of discount and since excise duty is payable on the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inction has been made by the Hon'ble Apex Court between a sales agent and an independent buyer. In the said case it was held that whether there was an agreement for sale or an agreement of an agency must depend upon the facts and circumstances and terms of each case and such facts and terms must be judged in the background of the totality of the circumstances. The ld. AR argues that in the instant case there is no dispute of the fact that the sales agent are rendering after sales service on behalf of the manufacturer and it is for this reason, a higher discount has been granted. This is evident from the statement of Mr. Paul D'Souza, Accounts manager of the appellant company wherein he has admitted that the sales agents are rendering certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re performing certain post clearance services to and on behalf of the appellant manufacturer and it is for this reason that they are getting a higher discount of 20% as against the normal trade discount of 5% to 15% which are given to customers of the appellants. The reliance placed by the Ld. Counsel for the appellant on the judgments of the hon'ble apex Court in the case of Philips India does not support their cause inasmuch as the said judgment was delivered in the context of the old Section 4. In that context, it was held that the provisions of after sales service benefited not only the manufacturer appellant but also the dealer and hence it was held that the same is not liable to be included in the assessable value of the goods. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion will have to be included in the assessable value. It is also pertinent to note that while passing the judgment in the Maruti Suzuki case, the Larger Bench had considered the judgments in Philips India case and Confidental Dental Equipments Ltd. case and they were distinguished. In the instant case, it is clearly evident that the sale associate/agents are getting a higher discount compared to the buyers who directly buy from the appellant manufacturer. It is also on record that the sales associates/agent are rendering certain services to the appellant manufacturer and it is on account of these services, they are getting a higher discount. We are, therefore, prima facie of the view that such discounts given to the sales agents cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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