Pre-notified cash discount is deductible from assessable value even if some buyers do not actually avail it

A pre-notified, uniformly applicable cash discount known to buyers before removal of goods remains deductible from assessable value even if some customers do not actually satisfy the payment condition. The relevant test is the discount's prior disclosure and uniform availability, not whether every buyer in fact avails it. On that basis, the valuation addition based on disallowance of the discount could not be sustained, and the connected penalty also fell once the demand itself failed.

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Issues: Whether a cash discount allowable to customers who pay within the stipulated period is deductible from the assessable value even when some customers do not actually satisfy the payment condition and whether penalty could survive on that basis.

Analysis: The discount was a pre-declared and uniformly applicable trade discount, known to buyers before removal of the goods. The fact that some buyers did not in fact avail the concession because they paid after the stipulated period did not alter the character of the discount or render it inadmissible for valuation purposes. The demand founded on disallowance of the discount therefore could not be sustained, and once the valuation addition failed, penalty was also unsustainable.

Conclusion: The cash discount was admissible in every case irrespective of actual availing by individual customers, and the demand and penalty failed.

Ratio Decidendi: A pre-notified and uniformly applicable cash discount is deductible from assessable value even if not actually earned by every buyer, because admissibility depends on its being known before removal and uniformly available, not on individual actual availing.

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