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1993 (3) TMI 239
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....anufacture of paper and paper board. In the course of manufacture of paper, a bye-product known as Magnesium Lignosulphonate (trade name - Celex sulphite Lye), classifiable under Heading No. 3804.00 of the Schedule to the Central Excise Tariff Act, 1985 (the "Tariff") emerged. 4. The appellants filed their price list No. I/IPP/87, dated 25-4-1987 in Part I effective from 1-5-1987, and declared their value as Rs. 2400/- per MT. Under columns 7 and 8 of the price list, it was indicated - "quantity discount admissible as per proposed price list except otherwise agreed upon". As per remarks in the price list, the discount pattern was shown in the price list enclosed therewith. 5. Under their circular No. IPP/CX/87-88/1, dated 10-4-1987 the discount pattern on monthly off-take basis, effective from Ist May, 1987, had been given as under :- "25 MT and above/month Rs. 25/- per M.T. 50 MT and above/month Rs. 50/- per M.T. 75 MT and above/month Rs. 75/- per M.T. 100 MT and above/month Rs. 100/- per M.T. 125 MT and above/month Rs. 125/- per M.T. 150 MT and above/month Rs. 150/- per M.T. 175 MT and above/month Rs. 175/- per M.T. 200 MT and above/month Rs. 20....
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....f Rs. 225/- per MT. will be applicable for quantity supplied on or after Ist May, 1987. 4. Quantity increased by another 1350 MT. for supply of Celex Sulphite Lye, thus making total quantity to 2050 MT. on order." 14. Bharat Refractories Ltd. (a Government of India Enterprise) Newai, Durg (MP) also filed their Purchase Order on 27-7-1987 for a quantity of 1600 MT @ Rs. 2275/- per MT. 15. The appellants filed price list No. 3/IPP/87-88, dated 10-7-1987 effective from 10-7-1987 in Part II for Orissa Cement Ltd. at assessable value of Rs. 2100/- per MT. The contractual price of Rs. 2100/- per MT after allowing the quantity/trade discount of Rs. 300/- per MT was shown in the price list. The relevant contract Order from Orissa Cement was also enclosed with the price list. 16. The price list in respect of supplies to Tata Refractories was filed under No. 4/IPP/87-88 on 20-7-1987 effective from 20-7-1987 also in Part II at assessable value of Rs. 2175/- per MT. Here also, the relevant amendment to the contract Order from Tata Refractories was filed with the price list. 17. Price List No. 5/IPP/87-88, dated 8-8-1987 effective from 8-8-1987 for supplies to....
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....rackpur Division after considering the discount, to be admissible to the intending buyers/consumers as envisaged in their Circular dated 10-4-1987, referred to above. They also submitted that the Collector (Appeals) did not consider the facts that not only the buyers were fully aware of the discount to be admissible in case of lifting the required quantity of celex lye in every month but also made contracts for that purpose. Further, the discount (quantitative discount) was actually allowed/granted for each clearance of celex lye for sale to the different buyers from their factory as could be evident from the gate passes issued by them. 23. They relied upon the Supreme Court decision in the case - Union of India v. Bombay Tyre International [1984 (17) E.L.T. 329 (SC)]. 24. They referred that the expression "Allowance and the nature of the discount being known at or prior to the removal of the goods" in the above judgment by the Hon'ble Supreme Court were very significant. In their case, the industrial buyers viz. Orissa Cement Ltd., Tata Refractories Ltd. and Bharat Refractories were fully aware of the terms and conditions and nature of trade discount (quantitative ....
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....987, they revised their base price to Rs. 2400/- per MT., subject to certain quantitative discounts. He referred to their Circular letter dated 10-4-1987 which had been sent to their customer and also referred to the letters received from their customers in response to that circular letter dated 10-4-1987. The customers had placed firm orders for the quantities which made them eligible for the quantity discount as offered by the producers under their circular letter referred to above. The appellants filed their price lists in Part-II of the price list proforma. Copies of the contracts had also been submitted alongwith those price lists. 29. The learned Senior Advocate mentioned that the Superintendent, Central Excise had allowed the discounts. The three price lists related to 3 buyers, and each of them was a separate class of buyers. Bharat Refractories was a Government of India Enterprise, and the appellants themselves were under the management of the West Bengal Industrial Development Corporation. 30. Shri Bhaskar Gupta, the learned Senior Advocate relied upon the following citations in support of his arguments :- 1. 1984 (17) E.L.T. 329 (SC) - U.O.I. and Other....
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.... approved from the Department. There was no escalation or price variation clause in the contract. The payments were final. There is no allegation of any flow back of money from the customers to the manufacturer. Assessments were not provisional. 36. Price lists were filed in Part-II of the price list proforma. A copy of the written contract was filed with each price list, and the same was verified by the concerned Central Excise Officer. The goods were supplied to the unrelated buyers. In one case the buyer was a Government of India Enterprise. The manufacturers themselves were under the management of West Bengal Industrial Development Corporation Ltd. We do not find anything to show that any relevant information has been withheld from the department. 37. At this stage, we may refer to the observations made by the Hon'ble Supreme Court with regard to trade discounts in their decision in the case - Union of India and Others v. Bombay Tyre International Pvt. Ltd. [1984 (17) E.L.T. 329 (SC)]. The Hon'ble Supreme Court had observed that discounts allowed in the trade (by whatever name such discount is described) should be allowed to be deducted from the sale price havin....
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....ce circular dated 10-4-1987, to the discount on monthly off-take basis, although the discount was said to be payable on quarterly basis by way of credit not as per actual monthly off-take of previous quarter. We, however, find that based on the contracts with their customers, only the net price, shorn of the discount, has been charged at the point of removal from the factory. This discount which was built-in the net discounted price chargeable at the factory gate at the time of removal could not be taken to be anything akin to the selling expenses. This net discounted price has been built in the contracts with the individual buyers and could not be considered anything else but the trade discount for whose exclusion at no point of time had there been any controversy. 43. In the case - Orient General Industries v. Collector, Central Excise, New Delhi - 1985 (21) E.L.T. 326 (Tribunal), the term `trade discount' came up for consideration before the Tribunal. Quoting the definition of trade discount as given in Law Lexicon by Shri T.P. Mukherjee (A trade discount is a deduction from the catalogue price of goods allowed by wholesalers to retailers engaged in the trade), the Tribu....
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....d. v. Collector of Central Excise, Cochin [1987 (27) E.L.T. 323 (Tribunal)], the Tribunal had observed that it was for the appropriate Officer to determine the assessable value excluding from it such elements of the price at which goods are ordinarily sold that cannot form part of the assessable value, not for the assessee himself to deduct whatever he fancies from the actual price and declare the resultant as the price at which the goods are ordinarily sold. They added that in the form prescribed the assessee has to declare the actual price at which the goods are ordinarily sold and furnish detailed particulars of such elements like cost of packing or discount of which he claims exclusion in the determination of the assessable value. All the particulars furnished have to be declared to be true to the best of the knowledge and belief of the assessee. 48. In the case before us we find that the appellants had declared in the price list itself the name of the buyer and the contract order number. The xerox copy of the contract order was enclosed with the price list. The Central Excise Officer has verified the columns in the price list with reference to the contract order, and f....
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....se - Collector, Central Excise v. Dewarance Macnell and Company Limited [1991 (56) E.L.T. 645 (Tribunal)] the respondents had filed classification lists since 1975, and the same were approved by the proper officer, and duty was accordingly paid under Tariff Item No. 68. The Tribunal observed that it could not, therefore, be said that they were guilty of any suppression or mis-statement of facts, fraud, collusion etc. 55. Similar views had been expressed by the Tribunal in the case - Safari Industries (I) Private Limited v. Collector, Central Excise [1991 (54) E.L.T. 308 (Tribunal)] about alleging suppression. 56. In the case before us also we do not find that any relevant information has been withheld by the appellants from the revenue. 57. In the case - Sandoz India Limited v. Collector of Central Excise [1992 (60) E.L.T. 624 (Tribunal)], relying on the Supreme Court decision in the case of Union of India v. Bombay Tyre International (supra) the Tribunal has observed that as long as the discounts are made known prior to the removal of the goods, they are admissible deductions. In that case before the Tribunal the discounts were declared in the price lists. ....