TaxTMI 
TaxTMI 
1986 (4) TMI 253
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....arch 1982. The appellants were charged with misdeclaration in respect of the abatement of discount claimed in the price list and duty demand was made under Rule 9(2) under Section 11A of the Act and the provisions of Rule 173Q were also invoked. The appellants as is seen from the facts on record, were selling part of their goods to the wholesale dealers and were allowing discount as mentioned in the price list. However, they were also making despatches to some other sub-dealers and consumers purported to be on the advice of the wholesale dealers and in the case of such sales, they are stated to have allowed less discount than indicated in the price list filed with the Department and difference between the discount given and that mentioned in the price list was passed on to the wholesale dealers. Discount allowed to the sub-dealers or consumers as the case may be, varied from case to case. However, the appellants have stated that no part of their discount out of the quantum mentioned in the price list was retained by them. In short, their plea is that the full discount as mentioned in the price list was split between the sub-dealers etc., and their wholesale dealers based on the ins....
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....86 (23) E.L.T. 8 (SC). He further pleaded that there is no case for levy of penalty and there is no finding that the appellants wilfully evaded the payment of duty and referred the case reported vide 1978 E.L.T. (J 159) (S.C.) in the case of Hindustan Steel Limited v. State of Orissa. Shri Mookerjee, however, pleaded that the prices to the sub-dealers and consumers where lower discount was allowed was at the behest of the wholesale dealers appointed by the appellants. But he could not show any evidence that the despatches had been made to sub-dealers etc. at the behest of wholesale dealers. He, however, stated that the Collector has not given any adverse finding in regard to this plea. His plea is that all the transactions were either with the wholesale dealers or through them and direct despatches to the sub-dealers etc. were for convenience of transport and for saving sales tax. 3.  Shri B.R. Tripathi, SDR, pleaded that actuality of all the transactions should be taken into account. According to him, there were transactions in which the lower discount was allowed and the realisation by the appellants was more than what was declared to the Department in the price list. He ....
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....been given. The transactions where lower discounts have been given have also been listed. The Collector, we find, has not disputed the appellants' submission that they had passed on the difference of the discount to the wholesale dealers in respect of sales directly made to sub-dealers etc. In fact, he has observed: "The overriding commission viz. difference between the two rates of discount given to the so-called wholesale dealer is in the nature of sales expenditure and there are not actual sales to such wholesale dealers but the sales are to other dealers who sell the impugned goods otherwise than in retail." This confirms that the difference has been passed on to the wholesale dealers. The appellants have pleaded before us that 60% of the sales in the case of one item and over 70% in the case of other item were made to the wholesalers and the discount passed onto the wholesale dealers was as declared in the price list. There is no contradiction from the learned SDR in this regard. 7.  The Collector in his finding has held: "Exhaust fans and air circulators respectively. It is important to note that no other provisions and/or any remarks were either mentioned in....
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....: (i) the appellants were selling part of the goods to the so-called wholesale dealers allowing the discount as mentioned in the price list; (ii) part of the goods were being sold to sub-dealers and consumers and lower discount than that declared in the price list was allowed and in no case lower than 15%; (iii) the differential discount, that is, the difference between lower discount to the sub-dealers and consumers and that in the price list was passed on to the wholesale dealers; (iv) the net realisation by the appellants is as per the price declared in the price list. 9.  Question that arises for our consideration is as to whether the discount as declared in price list should be allowed in respect of all the sales or the lower discount 15% which was uniformly given to all buyers should be allowed. The appellants case is that direct despatches to sub-dealers and consumers etc., was at the behest of the wholesale dealers appointed by them and for the convenience of transport and also for getting the benefit of paying lower rate of sales tax. The Collector has held that the differential discount passed on to the wholesale dealers is in the nature of commission ....