TaxTMI 
TaxTMI 
TaxTMI 
2000 (3) TMI 317
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.... Discount (TOD) at the rate of 2.5% on the value of goods cleared by distributors at the end of every financial year was not excludable from the disposable value of the goods. 2. Heard Shri M. Kunhikannan, learned DR who submits that even though the percentage of 2.5 is uniform, the actual discount allowed is not uniform to all dealers as it depends on the sales turnover and would be known only at the end of the financial year. He further submits that since this amount is given as recognition of the efforts taken by the dealers to promote sales, therefore, it is only an year ending bonus. On these two grounds he submits that Collector (Appeals) has erroneously applied the ratio of the Hon'ble Apex Court judgment in the case of Union o....
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.... discount the actual quantum could only be calculated at the end of the financial year when the total value of goods bought from the respondent by each buyer was available to both sides. He submits that revenue has submitted that the quantum itself being variable, it amounts to a discount which was not known before it was given. This is not correct in view of the fact that the rate of discount was always known before hand and this is not disputed by revenue itself. (c) In this connection, he submits that law is now well established in this behalf and cites the following decisions: (i) Perfect Circle Victor Ltd. v. Union of India reported in 1992 (60) E.L.T. 676 (S.C.). (ii) Union of India v. S.S.M. Bros. Pvt. Ltd. reported in 1986 (....
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....he rate of discount should be known prior to the date and time of removal of the goods from the factory gate. (b) The discount should be available uniformly to each known class of buyer. (c) The transactions between sale and purchase of goods should be at arms length. (d) There should be no flow back from the buyer to the seller on record. 9. Learned Collector (Appeals) has gone into the application of this judgment of the Hon'ble Apex Court to the facts of the case on record before her. She has clearly analysed that the rate of discount of 2.5% was known as far back as 1986 by an amendment to a document which was available as terms and conditions for removal of goods from the factory. She has further noted that this 2.5% was avail....