Trade discount on CNG supply to BEST allowed under section 4 Central Excise Act 1944

CESTAT Mumbai ruled in favor of appellants regarding trade discount offered to BEST for CNG supply. The tribunal held that under section 4 of Central Excise Act, 1944 (as amended by Finance Act, 2000), transaction value should be considered as the price at which CNG was supplied to BEST. Revenue failed to establish that discount was given in lieu of infrastructural facilities provided by BEST. The tribunal found trade discount deduction from assessable value admissible on sale transactions, following previous tribunal orders. Appeal was allowed, rejecting revenue's demand for additional central excise duty.

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Issues involved: The judgment involves the consideration of whether the trade discount offered by the appellants to a bulk buyer can be treated as additional consideration for the sale of Compressed Natural Gas (CNG) in a situation where the compressors or dispensers are installed at the buyer's premises for supplying CNG.

Summary:
1. The appellants had a contract with a buyer for the supply of CNG through compressors/dispensers installed at the buyer's premises. The Department alleged that the trade discount offered by the appellants was additional consideration received, leading to a central excise duty demand. The Commissioner (Appeals) upheld the duty demand, prompting the appellants to appeal to the Tribunal.

2. The Tribunal analyzed the transaction values and found that the price charged to the buyer was the sole consideration for the sale of CNG. It was established that the appellants did not receive anything beyond the agreed price and were not related to the buyer. The transaction value was deemed the appropriate value for central excise duty assessment.

3. Previous orders by the Tribunal supported the deduction of trade discounts from the assessable value in similar cases involving the appellants. The Tribunal dismissed Revenue's contentions regarding additional consideration received for facilities provided by the buyer, as the evidence did not support such claims.

4. The Tribunal noted that the issue had been settled in previous orders involving the same parties, with the Supreme Court dismissing Revenue's appeal. Consequently, the Tribunal set aside the impugned order confirming the duty demands and allowed the appeal in favor of the appellants.

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