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TMI Blog2001 (6) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... them from such customers, are retained as additional consideration, over and above the prices at which the goods were sold, therefore this notional interest amount was liable to be added to the assessable values. The Assistant Commissioner Orders, on these grounds in the three appeals decided by him, were upheld. 2.The appellants are manufacturers of certain engineering equipment. They collect advances from the customers who are new and whose credibility for payment was not known or is doubtful. Such customers advanced a minimum of 30% of basic material value, were given the finished goods, at prices which were 2.5% lower than the prices for other buyers. This was declared and termed as a cash discount of 2.5%. However other customers wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Box (I) Ltd. will govern the matter. If the advance has influenced the price to the extent the price is influenced to be treated as part of the assessable value." The Hon'ble Tribunal goes on to elucidate in para 4 "this does not mean that entire discount granted to customers who make advance payment or maintain cash credit balance is to be disallowed. What is to be disallowed is only the extent of additional benefit conferred on the customers..... A person who makes advance payment or maintains credit balance cannot be in a more disadvantageous position than a customer who makes immediate payment or prompt payment... ..If there is any extra benefit that is, than the former gets, that, in the given circumstances, may be regarded as the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubtedly. Here we are dealing not with prompt payment but with advance payment. Where there is a question of advance payment, the principles laid down by the Supreme Court in Metal Box India Ltd. v. Collector of Central Excise, Madras [1995 (75) E.L.T. 449 (S.C.)] will govern the matter. If the advance has influenced the price to the extent the price is influenced has to be treated as part of the assessable value. This does not mean that the entire discount granted to4. customers who make advance payment or maintain cash credit balance is to be disallowed. What is to be disallowed is only the extent of the additional benefit conferred on the customers on account of the advance payment or maintenance of the cash credit balance. A person who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, we are not asked to go into that aspect of the subject of deduction of cash discount on the sales being made to other customer who have not been given the benefit of cash discount as no such plea was made before us. But considering the law on the subject, if such "eligible cash deduction is granted to" other customer then the value of "Advance Paying' and 'non-advance paying customers' would be the same. Therefore the factory gate price to such reduced values to such 'non-advance paying customers' has to apply. (e) If sales to 'advance deposit customers' are not being considered as at 'normal price' and Section 4(1)(a) if not applicable and resort to Section 4(1)(b) is to be made, then one has to go through the 'The Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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