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TMI Blog2007 (12) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... which the goods were sold from the depot and claimed a uniform deduction of 12% quantity discount which was linked with annual quantum of off take by the dealers. The discount structure as disclosed to the revenue was as under: Annual quantity off take (Nos.) Discount 0 to 200 NIL 201 - 400 2% 401 -800 4% 801-1000 6% 1001 - 1200 8% More than 1200 12% Investigations were carried out by the department, which revealed that the appellants have claimed uniform discount of 12% while clearing the goods from the factory. The entire discount was not passed on to the customers and discounts were passed or. through credit notes on the advice of the marketing department to the dealer, the quantum of which, in many cases, was found to be less than 12% which was availed by them while clearing the goods from the factory. A show cause notice was accordingly issued stating that as per the Chartered Accountant certificate submitted by the appellant an amount of Rs. 4,10,78,058.00 which was claimed as discount for the period 1-5-1996 to 30-6-2000 as quantity discount was not passed on to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on the amount of Rs. 3,06,03,619/- it was submitted that the same was hit by limitation as during the period of May, 1996 to Sep., 1996, RT-12 returns were submitted by the appellant and upon scrutiny these were finalized by the department. Subsequent returns were filed in the same manner in which assessments were finalized and therefore, there cannot be any allegation of suppression. They have filed the price declarations during the relevant period which indicated that they were claiming 12% discount but the invoices were showing a lesser discount and therefore, the matter was in the full knowledge of the department. Internal and CERA audits were conducted from June, 1996 to May, 2000 wherein the internal audit party has visited nine times during this period and CERA, four times during March, 1998 and March, 2001 and therefore, there was no suppression of facts. Further, in fact nine show cause notices were issued to them on the basis of scrutiny of RT 12 returns alleging that they have not passed on the discount to their customers but these notices were dropped after the adjudicating authority was satisfied that the appellants were passing on the discount to their customers thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 619/- has not been passed on the customers even though the appellants have claimed the same, and have not paid the duty and has been pocketed by them. It was submitted that in those cases where the discount of 12% was not passed on account of the fact that dealers could not meet the conditions of the of the discount attaining the required turnover, the duty is demandable on the same as held by the tribunal in the case of Electrolux Kelvinator Ltd. - 2004 (163) E.L.T. 234 (Tri. - Del.) wherein it was held that quantity discount is permissible only to the extent actually given and availed-certain discounts although originally deducted while discharging duty at the time of clearance of goods, not passed on, for the reasons of buyers not meeting purchase targets, such amounts are not eligible for deduction. This decision squarely covers the appellants case as facts are identical. Reference was also invited to the Supreme Court decision in the case of Anant Raj Industries Ltd. - 2001 (130) E.L.T. 722 (S.C.) where in a similar view was upheld and quantity discount was held to be admissible only to those buyers who purchased more than the specific quantity in a particular year. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement Commission for settlement after admitting die duty liability. The fact that they were not passing discount was never known to the department and there fore it could not be said that the department has the knowledge of the same. In view of this, the extended period has been correctly invoked. 6. We have considered the submissions. We find that it is an admitted fact that though the appellants claimed a discount of 12% as a quantity discount at initial stage and did not pay duty on this discount amount. The discount claimed was not passed on to the customers because the customers did not achieve the target set by them in order to be eligible to the full quantity discount. The issue is squarely covered by the Tribunal decision in the case of Electrolux Kelvinator Ltd . and Hon'ble Supreme Court decision in Anant Raj Industries Ltd. case (cited supra). Though the appellants have made a plea that the actual discount passed on by them was much more, the nature of those discounts have never been spelt out nor the manner in which these discount amounts were arrived at and the methodology of passing those discounts has not been disclosed. This has been described as discount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which duty was demanded on the ground that the discounts have not been passed on but the same were dropped as the appellants satisfied the adjudicating authority that these discounts were passed on. This only helps the revenue rather than the assessee as this only strengthen the belief of the revenue that the appellants were actually passing on the discounts to the customers and therefore, the show cause notices were dropped and the necessity of looking into the entire accounts was not felt. The appellants also did not became wiser when the implications were made known to them that in case the discounts were not passed on duty is liable to be paid and the fact that they have not passed on the discounts claimed by them was in their knowledge as has been admitted by them but was clearly not in the knowledge of the department as the show cause notices issued by the department were dropped as for those periods evidence was produced to show that the discounts were actually passed on. The decision of the Apex Court in Nizam Sugar case was, therefore, in applicable as the show cause notices were dropped and the fact that the appellants were not passing on the discounts came to the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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