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TMI Blog2005 (7) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... as also imposed a penalty of Rs. 5 lakhs under Rules 173Q and 210 of the Central Excise Act, 1944. Interest under Section has been demanded. 2.The appellants manufacture polyester film in filament yarn, an excisable commodity. They sell the goods from the factory as well as from the depots. The appellants give various types of discounts such as cash discount, quantity discount, continuity discount, exclusive discount, special discount etc. These discounts are claimed as a consolidated percentage of the basic rate and are indicated in the declarations filed under Rules 173C and 173C(3A) from time to time. The appellants claim the abatement of the discount to arrive at the assessable value for the purpose of payment of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 4(4)(d)(ii) of the Central Excise Act, 1944 as it stood during the relevant period provides for exclusion of discounts from the assessable value provided the same is allowed in accordance with the normal practice of wholesale trade. (2) It is well settled that cash discounts may be passed on even after the clearance of the goods provided discount is known to the buyer prior to or at the time of clearance of the goods following case laws are relied on (a) UOI v. Bombay Tyre International Pvt. Ltd. - 1984 (17) E.L.T. 329 (S.C.) (b) Govt. of India v. Madras Rubber Factory Ltd. - 1995 (77) E.L.T. 433 (S.C.) (c) Ballarpur Industries Ltd. Anr. v. UOI Others - 1987 (30) E.L.T. 267 (Bom.) (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 303 (Tri.-Mum.) (4) In view of the above case laws, even if 3% of the total customers have not actually availed discounts, the appellants are entitled for the entire discounts. (5) The appellants have passed on excess discounts during the period in question, to the extent of Rs. 78,72,15,793/- on which they have not claimed any abatement. In case adverse decision is taken, against the appellant, the appellants should be given the benefit in respect of the above amount. Reliance is placed on Tribunal's decision in the case of Tata Oil Mills Co., Ltd. v. CCE - 1990 (46) E.L.T. 438) and Vinir Engineering Pvt. Ltd. v. CCE - 2004 (168) E.L.T. 34 (T) (F.O. 678-679, dated 25-3-2004). The second part of the demand relates to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f discount not availed by the customers would not arise. (d) The Dy. Commissioner in his letter dated 6-7-98 informed the appellant that even though trade discounts are not uniformly availed by all customers they are allowable deductions. (e) Departmental officers have been visiting the factory of the appellants and the audit parties from the department as well as the AG's office have been conducting regular audits. The appellants have not suppressed any facts or made any mis-declaration with an intention to evade payment of duty. (f) In fact the appellants passed on more discounts to the customers without claiming abatement to the extent of Rs. 78,72,15,793/-. The duty paid in excess is approximately Rs. 29 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department. In other words, the various types of discounts offered are known before the time of clearance of the goods. Even though the discount is not passed in the invoice, the same is given by way of credit notes. The appellants have produced invoice wise credit note details for the period involved. It is stated that only in 3% of the total number of cases, the discount is not passed on. However, it has been urged that the appellant has not claimed abatement in respect of an amount of Rs. 78,72,15,793/-. According to the appellant, the duty paid in excess is approximately Rs. 29 crores as against a demand of Rs. 47 lakhs. In the light of these facts, we are not convinced that the appellants suppressed facts with intention to evade duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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