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TMI Blog2017 (6) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as quantity discount - appeal dismissed - decided against appellant. - E/179/2007 - 40869/2017 - Dated:- 25-5-2017 - Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri C. Saravanan, Advocate For the Appellant Shri B. Balamurugan, AC (AR) For the Respondent ORDER Per Bench Appellants are engaged in manufacture of P P medicines and other medicaments falling under chapter 40 of the CETA 1944. These have been notified under Notification No.2/2005 (NT) dt. 07.01.2005 issued under Section 4A of the Central Excise Act, 1944 and therefore such goods are liable to be assessed with reference to the retail sale price which is required to be declared by the assessee on the package for the regular clearances; The products manufactured by appellants were cleared to various customers on payment of duty arriving the assessable value under section 4A of Central Excise Act, 1944. The appellants also cleared certain quantity of same products as quantity discount without payment of duty. The appellant did not pay duty on the products offered under quantity discount and also informed the department their intention no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Indica Laboratories Pvt.Ltd. (supra) which is later, cannot be good law. Ld. counsel also stressed that when quantity discount is applicable to valuation under Section 4, the same should be extended to valuation under Section 4A also. 5. Against this, Ld. A.R Shri B. Balamurugan reiterated the findings in the impugned order. He submitted that the case of Surya Food and Agro Ltd. Vs CCE Noida - 2003 (156) ELT 488 (Tri.-Del) was followed by the Tribunal in the case of Vinayaka Mosquito Coil Manufacturing Co.(supra) . In both these cases, the facts was that the quantity discount/free item were given in the same packet upon which the M.R.P was affixed. To make it clear, that free goods supplied were not packed separately and no M.R.P was affixed separately on such packets whereas the free items along with duty paid items were in one packet upon which the MRP was affixed. In the present case, the free supply/quantity discount given by the appellant was in separate packets bearing separate M.R.P affixed upon them. The Larger Bench has specifically addressed this issue and also referred to both Surya Food and Agro Ltd.as well as Mosquito Coil Manufacturing Co.(supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight, transport charges, commission payable to dealers and all charges towards advertisement, delivery, packing, forwarding and the like and the price is the sole consideration for such sale : Provided that in case the provisions of the Act, rules or other law as referred to in sub-section (1) require to declare on the package, the retail sale price excluding any taxes, local or otherwise, the retail sale price shall be constructed accordingly. Explanation 2. For the purposes of this section,- (a) where on the package of any excisable goods more than one retail sale price is declared, the maximum of such retail sale prices shall be deemed to be the retail sale price; (b) where the retail sale price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price; (c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r volume stipulated in agreement of sale between the assessee and the buyers and known at or prior to clearance of goods, must be deducted from sale price to arrive at value of excisable goods. 6.4 The taxability of, inter alia, quantity discount has also been reiterated by the CBEC in the circular dt. 30.06.2000 stating that discount of any type made known prior to clearance of goods to normal price subsequently and passed on to such customers is admissible deduction from transaction value. 6.5 From the above discussions, we find that there is no imbroglio with regard to taxability of such discount for the purpose of Section 4 valuation. 6.6 However, as discussed earlier, there is no such possibility in provisions of Section 4A ibid to allow for deduction of any such similar quantity discount. As mentioned earlier, there is no scope for reduction in the assessable value deemed to be equal to declared retail price. Only reduction permitted in the said section is that of abatement which would have to be specified/allowed by notification by Central Government. 6.7 Viewed in this context, we are of the considered opinion that there is no scope for quantity discount from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to specific provisions of law which envisages payment of duty on removal whether on sale or otherwise. If no duty is chargeable when there is no sale, then there is no need of various exemption notifications on free gift, for example, exemption granted to gifts made to agencies undertaking to earthquake relief measures. 6.10 The Larger Bench, while taking note of the fact that appeal against the Tribunal decision in the case of Vinayaka Mosquito Coil Manufacturing Co. has been summarily dismissed by Apex court, inter alia held that the concept of quantity discount applicable in the context of valuation under Section 4 is not applicable to determining the value under Section 4A. The relevant portion of the order is quoted herein below : 15.1 The decision of the Tribunal in the case of Vinayaka Mosquito Coil Manufacturing Company was taken up on appeal by the Department which has been summarily dismissed by the Hon'ble Supreme Court. Therefore, the order of the Tribunal merged with the order of the Hon'ble Supreme Court and became final. 15.2 The present case deals with P P medicaments which are governed by the provisions of DPCO which prescribed in det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgements is that the retail pack of Shampoo was bound together with a sticker label on the retail pack of free gel and the said combination pack was for direct supply at the retail sale stage to be purchased only by the ultimate customer. In other words, at no stage after clearance of the goods, the customer was required to pay up M.R.P price of the free gel pack. This is certainly not the facts of the case under decision. In this case, for eg; The syrup (Tushin syrup) is packed in unit container of 115 ml and the sticker with brand name, date of manufacture, M.R.P. etc. is affixed. 48 such unit containers are packed in one carton box. The M.R.P. of one unit container is printed on the box with the marking 48 x 115 ml. The invoice is raised only for 37 unit containers under section 4A and the remaining 11 unit containers are cleared as quantity discount without payment of duty. Thus out of M.R.P declared packages packed in a box, value of certain number is suomotu deducted by the manufacturer since same pertains to quantity discount supplied to the distributor. It is not the case that the said distributor would again not charge for the goods received by him free to next reta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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