Cash discount on prompt payment was deductible from assessable value when uniformly offered and actually granted to eligible dealers.

A uniform cash discount offered to all dealers and made conditional on payment within 7 to 10 days of despatch was deductible from assessable value under Section 4 of the Central Excise Act, 1944. The discount did not lose deductibility merely because depot invoices could not reflect it in advance, since eligibility depended on post-despatch payment. As the record showed no denial of the discount to any dealer who satisfied the stipulated condition, the disallowance was unsustainable.

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Issues: Whether the cash discount offered to dealers on payment within the stipulated period was deductible while determining the assessable value under Section 4 of the Central Excise Act, 1944.

Analysis: The discount was uniformly announced to all dealers and was available upon fulfilment of the stated condition of payment within 7 to 10 days of despatch. The invoices prepared at the depots could not reflect the deduction in advance because eligibility depended on post-despatch payment by the buyer. The record did not show that any dealer who satisfied the condition was denied the discount. A discount contingent on prompt payment, but actually allowed to all buyers who met that condition, could not be treated as a non-deductible discount merely because it was not reflected in the invoice at the time of sale.

Conclusion: The cash discount was deductible, and the disallowance made by the Collector was unsustainable.

Ratio Decidendi: A uniform cash discount offered to all dealers and actually granted to those who satisfy the stipulated payment condition is deductible from the assessable value under Section 4 of the Central Excise Act, 1944.

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