Prompt payment discount excludible from assessable value; refund remains available despite no prior intimation, subject to unjust enrichment.

Prompt payment discount agreed with dealers and passed through credit notes was held excludible from assessable value because the discount formed part of the dealer arrangement and was known at or before clearance, even if quantified later on receipt of payment. The requirement of prior intimation or provisional assessment was treated as directory, so non-compliance alone did not defeat refund where the discount nature was established. Authorities dealing with post-clearance price reduction were distinguished as involving a different factual setting. Refund of duty relatable to the discount was therefore maintainable, subject to the test of unjust enrichment.

---

---

Issues: Whether prompt payment discount agreed with dealers and allowed through credit notes was deductible from assessable value and whether refund of duty paid on such discount could be denied for want of prior intimation to the department or provisional assessment, subject to the test of unjust enrichment.

Analysis: The discount scheme was part of the dealer agreement and the additional discount was known at the time of clearance, though quantified later on receipt of payment. A commercial discount that is known at or before clearance and is actually passed on does not form part of the assessable value. The departmental instruction regarding provisional assessment was held to be directory and its non-compliance, by itself, could not disentitle the assessee when the nature of discount was established. The cited authorities on post-clearance price reduction were distinguished because they dealt with a different situation where price was reduced after removal rather than a pre-existing discount scheme. The earlier decisions recognising prompt payment discount as excludible from value were followed.

Conclusion: The refund claim was maintainable and the Revenue's challenge failed. The assessee was entitled to refund of duty relatable to the prompt payment discount, subject to the test of unjust enrichment.

---