Full trade discount allowed for excise valuation where price-list rates matched net realisation and no commission agency was proved.

Full trade discount declared in the approved price list was admissible for deduction from wholesale price where the evidence showed it was allowed on a substantial part of sales and the net realisation consistently matched the declared price list. The differential between the discount on direct sales and the price-list discount was passed on to wholesale dealers, and there was no proof that the dealers acted as commission agents or that the differential was sales promotion expenditure. On that record, the departmental view that only a minimum uniform discount could be allowed was unsupported, and the differential could not be added back to the assessable value.

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Issues: Whether the full trade discount declared in the approved price list was admissible for deduction from the wholesale price in respect of all sales, including cases where part of the discount was passed on to wholesale dealers after direct sales to sub-dealers or consumers, and whether the differential amount could be treated as commission or sales promotion expenditure for excise valuation purposes.

Analysis: The discount declared in the price list was shown to have been allowed in a substantial part of the sales, and the remaining transactions were not proved to be independent sales where the differential amount was retained by the assessee. The differential between the discount given on direct sales and the discount declared in the price list was passed on to the wholesale dealers, and there was no evidence that the wholesale dealers were acting as commission agents or that the amount represented proved sales promotion expenditure. The net realisation throughout matched the declared price list, and the departmental finding that only the minimum uniform discount of 15% could be allowed was unsupported by evidence on the record.

Conclusion: The assessee was entitled to deduction of the full discount as declared and approved, and the differential amount could not be disallowed as commission or added back to the assessable value.

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