Declared assessable value and trade discount defeated differential duty demand on promotional clearances; limitation also barred recovery.

Differential duty on clearances of Rin sold with a Vim bar was found unsustainable because the assessee had declared the revised assessable value under Rule 173C and no extra consideration flowed back. The demand was based on the earlier higher price being treated as the normal price, but the record showed that duty had to be computed only on the consideration ordinarily received at arm's length. The promotional free supply was treated as an admissible trade discount. The demand was also held to be time-barred beyond the normal period, and the appeal was dismissed.

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Issues: Whether the differential duty demand on clearances of Rin sold with a Vim bar was sustainable where the assessee had declared the revised assessable value under Rule 173C of the Central Excise Rules and no extra consideration flowed back.

Analysis: The assessee cleared the goods at the price declared to the department and supplied a Vim bar as part of a sales promotion arrangement. The demand proceeded on the footing that the earlier higher price was the normal price, but the record showed that the assessee did not receive any amount in excess of the declared sale price. In such a case, duty is payable only on the consideration ordinarily received for the goods sold at arm's length, and the promotional free supply was in the nature of an admissible trade discount. The demand was also found to be beyond the normal period.

Conclusion: The demand was unsustainable on merits and limitation, and the appeal was dismissed.

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