Trade discount deduction fails where the discount was not established at the time of clearance of goods.

An amount paid to an intermediary was held not deductible from assessable value as a trade discount under Section 4(4)(d)(ii) of the Central Excise Act, 1944, because the alleged discount was not shown to be known and established at the time of clearance of the goods. The actual customer was not shown to have been aware of the payment arrangement, the intermediary's name did not appear on the relevant gate passes, and the deduction was therefore not supported as a valid trade discount. On that basis, the claim for deduction failed and the appeal was liable to be rejected.

---

---

Issues: Whether the amount paid to an intermediary could be deducted from the assessable value of the goods as a trade discount under Section 4(4)(d)(ii) of the Central Excise Act, 1944.

Analysis: The deduction was claimed on the basis that the intermediary was merely facilitating supply to the actual customer. The actual customer was not shown to have been aware of the payment arrangement, the intermediary's name did not appear on the relevant gate passes, and the discount was not established as having been known at the time of removal of the goods from the factory.

Conclusion: The amount was not admissible as a trade discount for deduction from assessable value, and the appeal was liable to be rejected.

Ratio Decidendi: A deduction claimed as trade discount is not allowable unless it is known and established at the time of clearance of the goods.

---