TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Deputy Commissioner disallows discount in sales price citing lack of arm's length transaction.</h1> The Deputy Commissioner disallowed the discount claimed by the assessee in sales price for sales to M/s. Raptokos Brett & Co. Ltd., citing a lack of ... Valuation Issues:1. Disallowance of discount claimed by the assessee in sales price.2. Admissibility of discount allowed to a marketing agent under Central Excise Salt Act, 1944.3. Dispute regarding deductions allowed by the Commissioner of Central Excise (Appeals).4. Allowance of breakage as a deduction for determining value at factory gate.Issue 1: Disallowance of claimed discount:The Deputy Commissioner disallowed the discount claimed by the assessee in sales price for sales to M/s. Raptokos Brett & Co. Ltd. based on the allegation that the transaction was not at arm's length due to the relationship between the parties. The Deputy Commissioner noted that the goods were sold to the licensor on a principal-to-principal basis, and the discount was not admissible under Section 4 of the Central Excise Salt Act, 1944. The Deputy Commissioner emphasized that the discount was not in order as the products were entirely sold to the brand name owner, and the assessee failed to provide evidence showing that prices were not influenced by extra commercial considerations.Issue 2: Admissibility of discount under Central Excise Act:The Deputy Commissioner highlighted that the products sold bore the logo of M/s. Raptokos Brette & Co., with technical know-how provided by them, and were marketed by them. It was observed that the goods were not ordinarily sold by the assessee in the course of wholesale trade, leading to the conclusion that the discount claimed was incorrect. The Deputy Commissioner's Order-in-Original emphasized that the facts presented by the assessee were not denied at any stage, reinforcing the disallowance of the claimed discount.Issue 3: Dispute over deductions allowed by the Commissioner:Upon appeal, the Commissioner of Central Excise (Appeals) allowed various deductions to the appellants, including trade discounts, additional discounts, turnover tax, distribution expenses, interest on receivables, and breakages. However, the Commissioner noted that discounts related to the expiry date of medicines and interest on finished goods were not permissible based on previous court decisions. The Commissioner modified the order of the Adjudicating Authority accordingly, leading to the Revenue's appeal against the decision.Issue 4: Allowance of breakage as a deduction:The Revenue contended that breakage after goods clearance should not be deductible for determining the value at the factory gate, citing the Supreme Court's ruling in CCE, Meerut v. M/s. Surya Roshni Ltd. The Supreme Court decision established that payments made for breakages and losses after clearance were not allowable deductions. Consequently, the Tribunal set aside the impugned order, allowing the appeal based on the Supreme Court's legal precedent.This comprehensive summary outlines the key issues addressed in the legal judgment, encompassing the disallowance of claimed discounts, admissibility of discounts under the Central Excise Act, disputes over deductions allowed by the Commissioner, and the allowance of breakage as a deduction for determining factory gate value.
TaxTMI 
TaxTMI 
