9911796707
TMI Blog1987 (4) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... Board found that in most cases, trade discount was given as 6%, in some cases, trade discounts were allowed at rates higher than 6% and in some cases, lower rates were allowed. According to the petitioner, the Board laid down this formula with full knowledge of the fact that in some cases, no trade discount was actually given. The intention of the Board was to allow an average trade discount in all cases including the cases where no trade discount was at all given. 3. It is the case of the petitioner that the formula of 6% deduction was arrived at by the Board as a rough and ready measure and to avoid laborious calculation in every case of manufacture of footwear. The average formula was meant to apply when actual trade discount were higher than 6% as well as to cases where actual trade discount was lower than 6%. 4. My attention was drawn to the language of Section 4 of the Act which prior to October 1, 1975 laid down that in determining the price of any article under Section 4, no abatement or deduction shall be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excises and Salt Act." 8. An appeal was preferred by the petitioner from the order of the Assistant Collector which was disposed of by the Appellate Collector by an order dated 21-2-1975. The Appellate Collector held that the 'Miners' Boots' held had no wholesale market. The appellants could not satisfy the Assistant Collector that there had been any sale of the aforesaid goods other than to the consumers directly at contractual price. The Assistant Collector, therefore, was justified in ordering determination of the assessable value of the goods on the basis of the contract price without any abatement for trade discount which had not been actually allowed by the appellants. 9. The Appellate Collector expressed the view that the order by which 6% trade discount was allowed generally was applicable only to sales of footwear having wholesale market. 10. The petitioner preferred a revision application before the Government of India which was disposed of by an order, dated 16th December, 1976 by the Joint Secretary to the Government of India. In that revisional order it was held: "The petitioners have urged that the fact that no discount was extended in respect of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny and these independent distributors being in the nature of principal to principal should rightly constitute the basis of assessment to Central Excise duty within the meaning of Section 4 of the Central Excises and Salt Act, 1944". 12. In that order, it was directed that the Collector of Central Excise will determine the assessable value under Section 4 of the Central Excises and Salt Act, 1944, in the light of the principles laid down in that order. They should every year verify whether the percentage need any revision and apply the percentage that might be fixed as a result in the ensuing year for arriving at the value assessable to duty. 13. In paragraph 5 of the order, it was directed that "Subject to proper verification by the respective Collector of Central Excise, for the current year a discount of 16.43% in respect of canvas shoes and 15.93% in respect of leather shoes may be allowed off the wholesale price for arriving at such value. These discounts have been arrived at in the manner indicated below:- "(a) Distribution Charges 5.68 % (b) Travelling expenses 0.41 % (c) Advertisement expenses (Note: In the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt not only in respect of footwear sold wholesale by the petitioner company but also in respect of footwear sold from the retail outlets of the petitioner under the trade name 'Bata'. In other words, the trade discount of 6% was allowable not only in respect of assessment of BSC foot wears which were sold wholesale but also in respect of footwear marked 'Bata' which were sold through retail shops of the petitioner. 15. This formula, according to the petitioner, has been followed year after year till the present dispute arose. The 'Miners' Boots' that are sold by the petitioner to the consumers directly cannot be in a position different from footwear sold through retail outlets of the petitioner. My attention was drawn to the fact that in some cases a trade discount of 6% was allowed even when actual claim of the petitioner was 7%. Since a rough and ready formula of 6% trade discount was being allowed, the petitioner had accepted the position. This will be evident from the order, dated 14-8-1973 passed by the Collector of Central Excise in which it was observed "As in the previous years a trade discount of 6% is allowed against 7% claimed by the party". The show cause notice, dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders, dated 16th October, 1957 and 2nd May 1956 do not hold good any longer and the goods are being separately assessed. I fail to see why footwear marked 'Bata' sold through retail outlets to customers directly will enjoy 6% discount; but the footwear described as 'Miners' Boots' sold directly to the consumers will not enjoy this discount because the discount was not actually allowed to the consumers. The respondents are entitled to strictly follow the terms of the Excise Act and assess the value of the goods manufactured by the petitioner as and when each lot of goods came out of the factory of the petitioner. But that is not what has been done in this case. The respondents have chosen to make assessment by allowing 6% trade discount on average basis even when the petitioners have claimed that the trade discount should be 7% or more. That being the position, I fail to see how the respondents consistently with their stand of making assessment on average basis can treat the footwear manufactured by the petitioner called 'Miners' Boots' on a separate basis. 19. The impugned order passed by the Appellate Collector of Central Excise assumes that the 6% trade discount or ordered to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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