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TMI Blog2017 (3) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... ering a special discount to the appellant buyer who has made the advance deposit. It is an admitted position in this case that appellant offered 5% cash discount to the dealers who made advance payment. On a specific query from the Bench as to whether the same 5% cash discount is offered to any other dealer who is not making any advance to make payment, Ld. C.A. fairly states that they did not extend this cash discount to those dealers who are not making advance payment. On this factual position we have to hold that Explanation 2 to Rule 6 categorically covers the issue as in the case in hand is against the appellant-assessee. Assessable value on which duty liability needs to be discharged is the after addition of the cash discount - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period April 2005 to August, 2010, the appellant is liable to pay duty on the said amount which has been extended as cash discount by the appellant and is not in consonance with the provisions of Rule 6 of Central Excise Valuation Rules, 2000. After coming to the conclusion, show cause notices dated 29.4.2010 and 12.10.2010 were issued to the appellant/assessee which were adjudicated by the Commissioner of Central Excise and he confirmed the demand along with interest and also imposed penalties on the assessee/appellant as well as individual for non-inclusion of the cash discount for valuation purpose. Against such order the appellant/assessee filed these appeals No.E/130 131/2012. Concurrently, various other show cause notices were issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifically to Explanation 2 of the said Rule and submits that advance payment should be in the nature of advance deposit kept with the manufacturer and such advance deposit should influence the price. It is his further submission that there was no difference between the list price of the goods to any buyer and the cash discount has been provided in the case of advance payment and it does not go to reduce the value of the goods and not the price. As per catena of judgments, cash discount is permissible deduction for which proposition, he relies upon the decision of the Tribunal in the case of Polyhydron (P) Ltd. vs. C.C.E., Belgaum 2001 (132) ELT 410 (Tri-Bang.); C.C.E. vs. Dharampal Satyapal Ltd. 2001 (130) ELT 915 (Tri-Del.); Goodla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. [Provided that where price is not the sole consideration for sale of such excisable goods and they are sold by the assessee at a price less than manufacturing cost and profit, and no additional consideration is flowing directly or indirectly from the buyer to such assessee, the value of such goods shall be deemed to be the transaction value.] Explanation 1 - For removal of doubts, it is hereby clarified that the value, apportioned as appropriate, of the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee, sells his goods to Y against full advance payment at ₹ 100 per piece. However, X also sells such goods to Z without any advance payment at the same price of ₹ 100 per piece. No notional interest on the advance received by X is includible in the transaction value. Illustration 2. - A, an assessee, manufactures and supplies certain goods as per design and specification furnished by B at a price of ₹ 10 lakhs A takes 50% of the price as advance against these goods and there is no sale of such goods to any other buyer. There is no evidence available with the Central Excise Officer that the notional interest on such advance has resulted in lowering of the prices. Thus, no notional interest on the advance receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance payment which can be considered as offering special discount. The endeavour of the ld. C.A. to differentiate between the price and the value of goods, may not carry the case any further. In the case in hand, assessable value on which duty liability needs to be discharged is the after addition of the cash discount. 7. As regards the Revenue s appeals, we find that both the Revenue s appeals need to be allowed as on merits, we have categorically held that 5% of cash discount extended to dealers who are making advance payment as special discount offer. 8. Another endeavour of the ld. C.A. to distinguish between the advance payment and deposit was to state that there was no special discount extended, will also not carry the case any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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