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2001 (1) TMI 162

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..... d to avail of the facility of invoice value, and was therefore not required to file a price list for assessment of the goods manufactured by it. The sales of these goods from its factory were negligible, and it sold virtually all of its production either from its sales depot at Bombay, or through its distributor M/s. H.V. Industrial Electronics Pvt. Ltd. (HVIE for short). The notice alleged that Rider and HVIE were related persons, being interested in the business each other and the entire production of Rider were sold through HV Industries. Therefore, it is the price at which the goods were sold by HVIE, after permitting a discount of 25%, that should form the assessable value of the goods. In the case of the goods sold from the depot of R .....

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..... -87 and 1987-88, the entirety of the sales being from Rider's depots. There were sales at the factory gate as well as sales from Rider's depot in 1988-89. There were sales at the factory gate, and sales at the depots of HVIE in 1989-90 and part of 1990-91 with which the notice was concerned. He ruled that during the periods when there were sales at the factory gate, it is that price that would apply, for the goods sold from the depots of Rider and of HVIE. Therefore, for the sales in 1988-89, 1989-90 and part of 1990-91, the discount that was extended to buyers at the factory gate comprising 25% trade discount, quantity discount up to a maximum of 10% and cash discount up to a maximum of 5% could not be denied in the case of sales made from .....

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..... as well as Rule 9(2). The Collector has held that Rule 9(2) will not apply, and hence held inadmissible any demand for clearances made prior to 1-12-1988. He has held that for the remaining period, the discounts should be limited to 25%, disallowed cash discount and quantity discount, up to a maximum of 10% and cash up to a maximum of 5%, deduction of which was made by the manufacturer. The department here, too, questions the Collector's action in dropping the demand for the period prior to 1-12-1988. The manufacturer contends that it is entitled to deduct the discount totalling 40% in arriving at the assessable value. The issues for consideration in both appeals are thus common. 6.We will first consider the department's appeal. This que .....

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..... cash discount was extended to buyers at the factory gate and therefore should not be denied. The advocate for the appellant produced documentary evidence in support of the contention that the discount was extended in the case of sales made from the depot. 9.Where the factory gate price is known, it is that price that would apply, even in the case of sales from depots. This view of the Collector is supported by numerous judgments of the courts and of the Tribunal, of which we need only refer to the Judgment of the Supreme Court in Indian Oxygen v. Collector - 1988 (36) E.L.T. 723. It is on this consideration that he has permitted the trade discount of 25%. Different considerations however would apply in the case of quantity discount and ca .....

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..... manufacturer sells his goods, cleared from his factory on payment of duty, at a higher price in the depot. 11.None of the decisions cited at by the advocate for the appellant is on this point. Indian Oxygen Limited v. CCE - 1988 (36) E.L.T. 723, Oswal Agro Mills Ltd. v. CCE - 1998 (100) E.L.T. 141, Rubicon v. CCE - 1993 (66) E.L.T. 207, all laid down the proposition that, where the factory gate price is known, that is to be applied to sales from the depot. The decision in CCE v. Punjab Chemicals Pharmaceuticals - 1999 (107) E.L.T. 57, deals with removal of goods from the depots to different buyers in different regions, as does Garware Polyester Ltd. v. CCE - 1999 (105) E.L.T. 705. The ratio of the judgment in Bombay Tyre International .....

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..... s are insufficient to enable us to come to any conclusion. 14.After the conclusion of the hearing, the advocate for the appellant has filed a letter on 5-9-2000 enclosing an unreported decision of this Tribunal in CCE, Aurangabad v. Kesharbai Electronic Pvt. Ltd. in 2000 (122) E.L.T. 851 (Tri.) [Appeal E/886/95A with E/Cross/338/95A] contending that the ratio of this decision will apply. We are unable to find this to be the case. The Tribunal, in that order, had not accepted the appeal against the Commissioner's order on its finding that the Commissioner's conclusion that there was no relationship between the two did not warrant interference. It, therefore, declined to accept the contention in the appeal that the difference in the discoun .....

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