2005 (6) TMI 459

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....id discounts given to a special class of buyers for the period 1-4-2001 to 31-7-2002 involving a differential duty of Rs. 86,39,756/- has been confirmed by the Additional Commissioner including penalty. The Commissioner (Appeals) has reduced the penalty from Rs. 86,39,756/- imposed under Section 11AC to Rs. 50 lakhs and from Rs. 1 lakh imposed under Rule 173Q to Rs. 75,000/- 2. It is the contention of the appellants that they are manufacturers of Hermetically Sealed Compressors falling under CH 8414.30. Apart from direct sales from the factory gate, the compressors are also cleared from the factory on payment of duty to the depots from where they are sold to the dealers. During the lean season i.e. September to December, when the sa....

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....richment by their FO No. 1819/2004, dated 17-11-2004. Therefore, it is contended by the learned Counsel that the issue is settled in their favour by the OIA No. 1/2004, dated 20-1-2004 passed by the Commissioner (Appeals) on this issue and the same has not been challenged by the Revenue. It is also contended that after 1-4-2001, the assessee had been clearing the compressors meant for sale to the dealers opting for ABS at the assessable value arrived at after deducting the discounts offered under the scheme. This fact had been informed to the department vide letter dated 31-3-2001. They had also filed a price declaration on 31-3-2001 effective from 1-4-2001 specifically for clearances covered under the ABS. They maintained separate accounts....

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....he value due to the discount given. He again relies on the Tribunal ruling rendered in the case of Nestle (India) Ltd. v. CCE - 2000 (117) E.L.T. 376 (T) wherein the Tribunal has held that special discount granted to specific contracting parties is an admissible deduction. He also refers to Swastic Fragrance v. CCE - 2000 (121) E.L.T. 375 (T) wherein the Tribunal has held that discounts allowed under an incentive scheme are eligible for deduction from the assessable value. He also submitted that penalty is not leviable in the facts and circumstances. 3. The learned SDR reiterated the departmental contention and contended that the dealers under the ABS scheme are not a separate class of buyers. Therefore, they are not eligible for de....