CREDIT NOTE AGAINST EXCISE DUTY PAID

[SURYAKANT MITHBAVKAR]

Customer has place order for the  material wherein they have mentioned discount. while preparing the invoice we are not treat any discount .

Can we pass them credit note for discount giving effect of excise duty which is already paid  and reverse the excise duty (i.e. the excise duty difference of discount adjusted against other clearance)

Pl advice.

 

[YAGAY and SUN]

In Aries Agrovet Industries v CCE  (2007 (8) TMI 186 - CESTAT, BANGALORE)= (2008) 221 ELT 209 (CESTAT), It was held that discount given at end of month by way of credit note are eligible for deduction from assessable value - same view in CCE v Tempo Industries (2008 (2) TMI 105 - CESTAT, CHENNAI)=2008 226 ELT 375 (CESTAT).

In Gujarat Borosil v CCE  2009 (12) TMI 379 - CESTAT, AHMEDABAD = (2010) 253 ELT 610 (CESTAT), it was held that discount can be passed on later by way of a credit note.  If buyer were aware of discount structure, deduction of discount is admissible even if not shown in Invoice.

Trade discount paid later is allowable as deduction - CCE v DCM Textiltes  (2006 (2) TMI 168 - SUPREME COURT OF INDIA) = (2006) 195 ELT 129 (SC).

Discount equal to CENVAT credit allowable - In Incab Industries Ltd v CCE  (1997 (6) TMI 205 - CEGAT, NEW DELHI) =1998 (98) ELT 560 (CEGAT), the assessee ha d agreed to give discount equal to CENVAT credit.  It was held that assessable value has to be calculated after allowing this deduction from price. 

[DEEPAK SHARMA]

Dear suryakant,

it is extremely stated that modvat of excise duties on the basis of credit note is inadmissible  

AI Summary

Credit note discounts can reduce assessable value, enabling reversal or adjustment of previously paid excise duty. Post sale price adjustments by credit note that reflect genuine discounts known to the buyer or evidenced later are deductible from the transaction price for excise valuation, so the assessable value must be computed after allowing such discounts; judicial precedents support corresponding duty reversal or adjustment, while administrative views may contest modvat/CENVAT reversal absent clear entitlement.