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TMI Blog2017 (1) TMI 1072X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the said explanation as sufficient to arrive at the conclusion that the goods were cleared in special packing condition at the instance of the buyers so as to allow the expenditure as deduction from the price. In the result, the learned Commissioner's finding on special secondary packing is upheld. On the issue of deduction of freight charges, We find from the statements furnished for each of the Financial year in calculating the discounts availed and consequently the differential duty paid by the Appellant, the element of freight was shown on actual basis; also in their reply to the Show Cause Notice the same figures of actual freight charges incurred had been mentioned. However, its admissibility has to be considered on the basis of evidences even though in principle it is admissible in view of the judgment of Hon ble Supreme Court in the case of CCE&C, Nagpur Vs Ispat Ltd [2015 (10) TMI 613 - SUPREME COURT]. Accordingly, this issue also requires to be remanded to the Adjudicating Authority for reconsideration. Appeal disposed off - matter on remand. - Central Excise Appeal No. 225 - 227 of 2007- DB - A/10136-10138/2017 - Dated:- 20-1-2017 - Dr. D.M. Misra, Member (Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating Authority in passing the order, a copy of the same was not handed over to them resulting into violation of principles of natural justice. Consequently, this Tribunal by its order dt.17.02.2005 remanded the matter to the Adjudicating Authority for de novo consideration, after supply of the report of the Assistant Commissioner dt.19.08.2004. Pursuant to the said Order, the learned Commissioner re-adjudicated the case and confirmed total demand of ₹ 40,93,056/- and imposed equal amount of penalty under Section 11AC of Central Excise Act, 1944; also imposed personal penalty of ₹ 25.00 lakhs on Shri Nanik Madnani, Authorised Representative and President, ₹ 10,000/- on Shri K. Solanki under Rule 209A of erstwhile Central Excise Rules,1944 26 of Central Excise Rules 2002. Hence, the present appeals. 3. It is submitted on behalf of the Appellant submits that the Ld. Commissioner has disallowed the cash discounts, deductions on account of freight and special packing charges in confirming the demand. With regard to cash discount, it is his contention that the department has not disputed its admissibility when the same was availed by the customers, but disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harges from the price on the ground that it was averaged and not claimed at actual basis. It is his contention that they have claimed the outward freight charges on actual basis, at the end of each financial year and accordingly paid the differential duty on the excess amount claimed initially at the time of removal of the goods, hence, the observation of the learned Commissioner is factually incorrect. 3.3 With regard to the deduction on account of special packing charges, it is submitted that the moulded furniture was normally cleared without any packing; accordingly in the excise invoices it was shown as loose . But, wherever it was cleared after special packing in hessian bags/jute covering, at the request of customers, in the relevant invoices it was shown as bundles . It is his argument that merely because the purchase orders were issued belatedly by the purchasers, the deduction on this count, cannot be denied to the Appellant. 3.4 It is further submitted that the demand is barred by limitation, as all the discounts were claimed on the basis of declarations made in their price lists. At the end of each financial year, on the basis of actual discount availed/passed on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Appellant could not establish the fact that the Appellant had made known to their customers about the subject discount prior to removal of the goods as laid down by Hon'ble Supreme Court in Bombay Tyre International s case. The same principle has also been laid down by Hon'ble Bombay High Court in Goodlas Nerolac Paints Ltd 1983 ELT 189 (SC) . Further, he has submitted that the certificate now produced from the customers indicating that the policy has been made known to them before removal of the goods cannot be acceptable at this stage as the same has no evidentiary value. On the admissibility of deduction on freight, he has submitted that the learned Commissioner has rejected their claim as Appellant had simply declared and claimed discount on account of freight @4%/5%/1.5% as per price declaration filed under Rule 173C of Central Excise Act,1944. On the claim of deduction on account of special Secondary packing, Ld. A.R submits that the Ld. Commissioner has rightly rejected the same after analyzing the purchase Order(s) of the respective customers produced by the Appellant claimed to have been issued in 1998-1999 as the same were found to be issued much afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different periods, now becomes irrelevant. 7. In denying the cash discount from the price, the learned Commissioner, though accepted the principle laid down by Hon'ble Bombay High Court in Goodlas Nerolac Paints Ltd s case that all the customers need not avail the cash discount so as to allow the same as deduction from the price in arriving at the assessable value, however, observed that other main condition of disclosure of nature of cash discount to the customers prior to removal of the goods had not been fulfilled by the Appellant in the present case. In arriving at the said conclusion, the learned Commissioner reasoned that since there are apparent contradictions in the percentage of cash discount as declared in the price list filed under Rule 173C of erstwhile Central Excise Rules, 1944, mentioned in their business policy circular, written submissions during the adjudication proceedings, therefore, the customers could not have been informed about the true nature and percentage of cash discount prior to removal of the goods. On behalf of the appellant is vehemently argued that the cash discount was invariably disclosed in their business policy circular and certain custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were cleared in special packing condition at the instance of the buyers so as to allow the expenditure as deduction from the price. In the result, the learned Commissioner s finding on special secondary packing is upheld. 9. On the issue of deduction of freight charges, the same has been denied by the learned Commissioner, for the period before 01.07.2000 and thereafter observing that the Appellant had simply declared and claimed discount/deduction on account of freight as percentage; they have never claimed the actual cost of freight or equated freight, hence not eligible to such deduction. The claim of the Appellant is that they have been disclosing the actual freight charges incurred at the end of financial year while re-determining the assessable value, even though in their price declaration, deductions on account of freight was claimed as a percentage of price on notional basis. It is their contention that the findings of the learned Commissioner are factually incorrect. We find from the statements furnished for each of the Financial year in calculating the discounts availed and consequently the differential duty paid by the Appellant, the element of freight was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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