1988 (5) TMI 134

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....arges claimed by the appellant as trade discount. This discount was allowed by the appellant to indentors (dealers) to procure more indents. The service charges paid by the appellant were for procuring orders and the Ld. Assistant Collector as well as Collector (Appeals) were of the view that the service charges paid by the appellant were brokerage and commission and such payments could not be treated as trade discount within the purview of Section 4 of the Central Excises and Salt Act, 1944 read with clarificatory order of the Hon'ble Supreme Court dated 14/15-11-1983 and hence the service charges/payments claimed by them , could not be construed as trade discount given in the normal course of trade and could not be deducted from the norma....

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....d. S.D.R., states that the service charges discount is not admissible and it is not a trade discount as understood in the normal trade parlance. It is no abatement from the list price and is a commission paid to the indentor for procuring the orders from individual buyers or third parties and Clause 9 of the agreement between the appellant and the indentor provides for commission. It is not available to the wholesale trade; it is available to the indentors and is a commission and not a trade discount. Shri Krishnamurthy, the learned S.D.R., on the issue of deduction of interest on receivable has argued that this issue was raised before the Assistant Collector but the learned Assistant Collector did not give any finding and the appellant had....

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.... goods sold or contracted for sale. Undoubtedly, there is no evidence on record to the effect that the service charges paid by the appellant to the indentor in terms of agreement between the appellant and the indentor was received back by the appellant. The actual payment of service charges will not change the nature of the transaction. Service charges in the matter before us is nothing but a commission paid to the indentor for procuring orders and the Ld. Sr. Advocate - Dr. L.M. Singhvi has laid great reliance on the clarificatory judgment of the Hon'ble Supreme Court in the case of Union of India and Others v. Bombay Tyres International Pvt. Ltd. reported in 1984 (17) E.L.T. 329 and in the Moped India Ltd. case reported in 1986 (23) E.L.T....