TaxTMI 
TaxTMI 
2000 (3) TMI 317
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....e ground that the Turn Over 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 ju....
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....nt because by the very nature of this 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.). ....
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....96 the Hon'ble Apex Court has laid down the following tests with respect to the admissibility of a trade discount: (a) The 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 ....
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....ot available uniformly to all. Therefore, in our considered view, the test laid down by the Hon'ble Apex Court in the case of Bombay Tyre International are truly satisfied by the facts of this case. 11. In this connection our own decisions draw strength from the four case laws cited by the learned Advocate as noted above to the same effect. As against that we note that the decision in the case of S.S. Miranda relied upon by revenue was covering a situation where an incentive was given as a surprise package and nothing thereof was known to the buyers in advance or at the time of removal of goods. In view of the analysis above, these are not the facts in this case and hence this judgment stands distinguished. 12. We have also ....