Trade discount remained fully deductible for excise valuation despite different pass-through arrangements to direct buyers.

Declared trade discount remained deductible in full for central excise valuation where the bulk of sales were made at the factory gate to wholesale dealers at approved prices. The Tribunal treated direct buyers, including Government Departments, as a separate class and held that the fact that only part of the discount was passed on directly to such buyers, with the balance routed through wholesale dealers, did not justify ignoring the declared discount. As the relevant facts were materially similar to the earlier set of findings relied on by the Collector, differential duty could not be demanded on a value different from the approved factory price.

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Issues: Whether the entire declared trade discount was deductible while determining the assessable value for central excise purposes, and whether differential duty could be demanded on the basis of a reduced discount to some buyers.

Analysis: The Tribunal found that the facts for the relevant period were materially similar to those in the earlier order relied upon by the Collector, which had been set aside and fresh findings had been recorded. The bulk of the sales were at the factory gate to wholesale dealers at approved prices. In cases of direct sales to customers, only part of the declared discount was passed on to the customers and the balance was given to the wholesale dealers within whose jurisdiction those customers operated. The Tribunal accepted that the direct buyers, including Government Departments, formed a separate class of buyers and that the variation in the manner of passing on discount did not justify ignoring the declared trade discount for valuation.

Conclusion: The entire declared trade discount was to be deducted from the assessable value, and no differential duty was payable on a value different from the approved factory price.

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