Incentive scheme deduction in provisional assessment allowed where the discount was known to buyers at the time of removal.

A deduction under an incentive scheme may be allowed in finalising a provisional assessment even if it was not disclosed in the original clearance documents, provided the scheme was announced in advance and was known to dealers or customers at the time of removal of the goods. Provisional assessment is not limited to deductions specifically claimed in the return or annexures. If the factual basis of the incentive existed during the relevant period and the buyers were aware of it when the goods were cleared, later quantification or disclosure does not by itself defeat the claim. The deduction was therefore treated as admissible and the disallowance set aside.

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Issues: Whether deduction claimed on account of an incentive scheme was admissible while finalising a provisional assessment, even though the claim was not initially disclosed in the clearance documents.

Analysis: The admissibility of a deduction depends on whether the discount or incentive scheme was known and understood by the dealers or customers at the time of removal of the goods. Provisional assessment is not confined only to the specific deductions originally disclosed in the return or annexures. Where the scheme was announced in advance and operated during the relevant period, later quantification and disclosure do not by themselves defeat the claim. The requirement of disclosure in the clearance documents does not bar a deduction claim in a case of provisional assessment if the factual basis of the incentive existed and was known to the buyers at removal.

Conclusion: The deduction on account of the incentive scheme was admissible, and the disallowance was set aside.

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