1965 (3) TMI 14

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..... ry is situated at Tardeo in Bombay. By the Finance Act of 1961 an item was included in the First Schedule to the Central Excises and Salt Act, 1944 by which ad valorem duty of 10 per cent was imposed on certain types of patent and proprietary medicinal preparations. lt is not disputed that the petitioner's said products, viz., Germs Cutter and Queen's balm, were thus subjected to an ad valorem duty of 10 per cent under the Central Excises and Salt Act, 1944. The manner in which the value of the products is to be ascertained for the determination of the duty is laid down in Section 4 of the said Act, and the dispute raised by the petitioners arises on the interpretation of some of the terms of that section. That section is in the following t .....

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..... 8. In appreciating this contention some additional facts are required to be noticed. It has been found that the Distributors market the products in the mofussil through sub-agents who get a commission of 121/2S* per cent out of which a commission of 10 per cent is made over to all dealers who purchase the products from the sub-agents. In Bombay proper all sales are effected at the rates shown in the price list of the Distributors without even a 10 percent discount. However, gifts in kind are annually given by the sole Distributors to Bombay dealers and the gifts are said to be valued at 10 per cent of the total price paid by the dealers for the said product. It was further ascertained that the sole distributors gave a "quantity discount" .....

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..... ointed out that the value of the gifts given to the dealers works out at 10 per cent of the purchase price paid by them during a particular year. Mr. Sorabjee, however, told me in response to an inquiry which I made that it is the Distributor who decides what gifts are to be given to various dealers and that the dealers do not have the right of deciding what gifts should be given to them. The value of the gifts cannot be regarded as a trade discount. I do not, however, find any adequate reason why the excise authorities should have refused to make any deduction for the "quantity discount" which is allowed by the Distributors to the wholesale dealers. There is no reason to suppose that a trade discount must always be in the form of money and .....

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..... at the first respondent should hear the petitioners again and, after ascertaining such other facts as may be required modify the impugned order if necessary so as to make such deduction for quantity discount as may be found permissible on the facts established before him. ***** 13. As stated above there will be a direction to the first respondent that he should again hear the petitioners with regard to their claim for deduction for "quantity discount" and after ascertaining such further facts as may be required make such alteration as may be necessary in his appellate order dated 18th August, 1962 (Exh. K to the petition). He should decide the question on the basis that the quantity discount in the present case amounts to a trade discount .....

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