1998 (11) TMI 431 - AT - Central Excise

Appellate Tribunal Upholds Commissioner's Decision on Goods Valuation

The Appellate Tribunal CEGAT, Mumbai upheld the Commissioner (Appeals)' decision regarding the valuation of goods for assessment under Section 4 of the ... Valuation Issues: Valuation of goods for assessment under Section 4 of the Central Excises Act - Admissibility of various deductions like turnover discount, cash discount, liaison commission.The appeal before the Appellate Tribunal CEGAT, Mumbai involved the valuation of goods manufactured by the respondents for assessment under Section 4 of the Central Excises Act. The respondents had claimed deductions in their price list for packing material, turnover discount, cash discount, behavioral discount, and liaison commission. The Jurisdictional Assistant Commissioner disallowed turnover discount and limited cash discount to the extent actually passed on to customers. The Commissioner (Appeals) allowed turnover discount, stating that the dealers were aware of the discount rate at the time of goods removal, even though the quantification and payment occurred later. The Commissioner (Appeals) relied on legal precedents like the Supreme Court judgment in Bombay Tyres International and permitted cash discount deductions based on judgments like Jenson & Nicholson (India) Ltd. and Music India Ltd. The appellant contested this decision, arguing that cash discount should only be allowed to the extent passed on to customers, citing the Tribunal decision in R.R. Paints v. Collr. of Central Excise, Ahmedabad. However, the respondents argued that the issue of turnover discount was settled by Supreme Court judgments in cases like Bombay Tyres International Ltd. and G.O.I. v. MRF Ltd., where known discounts at the time of removal were considered admissible deductions. Regarding cash discount, they referenced the Karnataka High Court judgment in H & R Johnson (India) v. Central Board of Excise & Customs, which supported allowing discounts for prompt payment. The Tribunal, after considering the legal precedents and arguments presented, upheld the Commissioner (Appeals)' decision, stating that both turnover and cash discounts were covered by previous High Court and Supreme Court judgments, and thus, there was no basis to interfere with the order. Consequently, the appeal was rejected.