Assessable value and limitation: quantity discount allowed, related-person objection rejected, and earlier demand held time-barred.

A 30% quantity discount was deductible in assessing value because the price lists were approved under section 4(1)(a), the same discount was extended on identical terms to other buyers, and the related-persons objection was neither pleaded in the notice nor tested against section 4(4)(c). The earlier demand was time-barred because the relevant period had ended before the notice, while returns, gate passes, and approved price lists were already available to departmental officers; any short levy arose from failure to verify the discount position before approval. Confirmation under Rule 10A was therefore not sustainable.

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Issues: (i) whether the 30% quantity discount was deductible in determining the assessable value and whether the disallowance on the ground of related persons was sustainable; (ii) whether the demand for the earlier period was barred by time and whether confirmation of demand under Rule 10A was justified.

Issue (i): whether the 30% quantity discount was deductible in determining the assessable value and whether the disallowance on the ground of related persons was sustainable.

Analysis: The price to the buyers was approved under section 4(1)(a) of the Central Excises & Salt Act, 1944. The appellants extended the same quantity discount to other buyers on identical terms, and the buyer-specific objection of related persons had not been put in the show-cause notice. The related-persons objection was also not examined with reference to the statutory definition in section 4(4)(c). On these facts, the discount could not be denied.

Conclusion: The 30% quantity discount was deductible, and the objection based on related persons was not sustainable.

Issue (ii): whether the demand for the earlier period was barred by time and whether confirmation of demand under Rule 10A was justified.

Analysis: The demand related to a period ending before issuance of the notice, while the appellants had filed regular returns and gate passes and the approved price lists were available to the departmental officers. The short levy, if any, was attributable to the officers' failure to verify the discount position before approving the price lists, and the earlier part of the demand was therefore time-barred. In these circumstances, confirmation of the demand under Rule 10A was not justified.

Conclusion: The demand for the earlier period was time-barred, and confirmation under Rule 10A was not sustainable.

Final Conclusion: The assessee succeeded in challenging the assessment and demand, and the order of the Assistant Collector was set aside.

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