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TMI Blog2004 (11) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the authorised signatory of the Appellant-company. Further, if the defective goods were substituted by new goods at one factory, it is reasonable to include that the same practice would be prevalent at the other factory of the same manufacturer. We, therefore, hold that the Appellants were removing the new excisable goods to their customers in lieu of defective goods received back by them. We, however, find force in the contention of the learned Advocate that duty cannot be demanded in respect of the defective goods against which no excisable goods were cleared by the Appellants. This aspect is being remanded to the jurisdictional Adjudicating Authority for reconsideration of the material/evidence that may be produced by the Appellants within two months of receipt of this Order. As per new Section 4, the value has undergone a complete change. The question to be asked for determination of the assessable value under new Section 4 is what is the transaction value of the goods that is the price actually paid or payable for the goods when sold. Contrary to these provisions, under the old Section 4 the value was a deemed one, that is to say, the price at which goods are ordinarily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the cash discount is not a cash price but is a credit price; that thus the difference between cash price and credit price representing interest reimbursement for the Credit period is not to be included in the assessable value. He relied upon the decision in the case of CCE, Ghaziabad v. Pace Marketing Specialities Ltd., 2004 (167) E.L.T. 401 (T) = 2004 (60) R.L.T. 726 (CESTAT) and Kiran Mouldings Ltd. v. CCE, Mumbai-IV, Final Order Nos. 124-126/2004-NB (A), dated 3-3-2004. 4. He mentioned that the Commissioner has also confirmed the demand of duty on the ground of Appellants' claiming wrongly abatement of deductions of Volume Discount and Sales Tax; that during the course of investigation, they had under their letter dated 9-7-2001 given the details to Department with respect to volume discount and sales tax claimed by them and actually passed on; that the Department has alleged that there was difference between quantum of sales tax deduction and volume deduction claimed in price declaration vis-a-vis actually passed on. The learned Advocate contended that the Department is not disputing actual Volume Discount passed on or Sales Tax which was indicated in letter date 9-7-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently to the customers; that the duty in respect of such goods works out to be Rs. 2,50,454/- which is unsustainable. 6. Countering the arguments, Shri S.C. Pushkarna, learned D.R., reiterated the finding as contained in the impugned Order and emphasised that Shri R.K. Gulati has never retracted his statement; that he is the authorised signatory of the Apepllants and thus it is evident that the defective goods were not repaired but replaced; that as Shri Gulati was authorised by the Appellants to deal with Central Excise matters, his statement is applicable in respect of both the units of the Appellants. Regarding volume discount and Sales Tax, the learned D.R. mentioned that the contents of letter dated 9-7-2001 were clarified by Shri M.K. Goel, Senior Manager in his statement dated 16-7-2001 wherein he had stated that value of depot sales did not include the amount of sales tax, volume discount or cash discount; that, therefore, the method adopted by the Department for computation of amounts of claimed deduction is correct. 7. In respect of cash discount, the learned D.R. mentioned that 'transaction value' as defined in Section 4(3)(d) of the Central Excise Act co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of volume discount passed on by the Appellants and actual amount of sale tax paid/payable have to be deducted from for the purpose of determining the assessable value of the goods. This is a factual matter which has to be looked into again by the jurisdictional Adjudicating Authority after considering the material adduced by the Appellants within two months of receipt of this Order. 10. Regarding cash discount, it is not in dispute that the duty has been demanded in respect of cash discount which was not actually passed on to the customers. The learned Advocate has relied upon the decision in Pace Marketing Specialities Ltd., supra, wherein it has been held by the Tribunal that cash discount is a discount allowed for prompt payment for the goods and when this discount is reduced from the invoice price, transaction value at the time of delivery of goods is obtained, otherwise, the invoice price is a future price and as the assessable value is to be determined with regard to time of removal financing and other cost cannot form part of the assessable value. With due regard, we find ourselves unable to agree with this view. The measure for valuation under New Section 4 of the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e asked for determination of the assessable value under new Section 4 is what is the transaction value of the goods that is the price actually paid or payable for the goods when sold. Contrary to these provisions, under the old Section 4 the value was a deemed one, that is to say, the price at which goods are ordinarily sold in the course of wholesale trade. Now under New Section 4, one has not to look as to what is the price at which goods are ordinarily sold in the course of wholesale trade. The price actually paid or payable is to be taken up as the assessable value. In the present matter, the transaction value has to be taken for the purpose of assessment of duty under Section 4 of the Central Excise Act and as admittedly no cash discount has been given to the customers, the actual price paid by them shall be the assessable value. 12. Accordingly we reject the appeal as far as it relates to the allowance of deduction on account of cash discount. In respect of volume discount and sales tax and duty liability in respect of returned goods, the matter is remanded to the jurisdictional Adjudicating Authority for re-adjudication in terms of our direction. We leave the issue regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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