2013 (3) TMI 450

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....heir central excise records for 1999-2000 and 2000-2001, it was found that the Appellant had a system of giving trade discounts. The discounts were shown in the invoices and were deducted from the assessable value. However, these discounts were not given at the time of clearance and instead the same were passed on to the customers later on in the form of credit notes. According to the Department, in terms of the provisions of Section 4, the deduction of only those trade discounts is permissible which are known at the time of clearance and are passed on to customer at that time. According to the department, there is no evidence that the discounts whose deduction was claimed, had been passed on to the customers at the time of clearances. On t....

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....e buyers. 1.4 Against the above order of CCE (Appeals), this appeal has been filed. 2. Heard both the sides. 3. Shri Rupinder Singh, Advocate, the learned Counsel for the Appellant, assailing the impugned order pleaded that the Appellant given various trade discounts like cash discount, quantity discounts etc. to their customers, that the discounts were known at the time of clearance and the same are mentioned in the invoices, that while the duty was paid at the discounted price, in some cases, the discounts were passed on to the customers subsequently by issue of credit notes, that in there cases only, the department is denying the deduction of discounts, that para 2 of the show cause notice itself states that the d....

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....d under provision of Section 11A(1) is not applicable, as the Department was fully aware of the practice being followed by the Appellant, and that the impugned order is, therefore, incorrect and not sustainable. 4. Shri S.R. Meena, the learned Senior DR defended the impugned order and reiterating the findings of CCE (Appeals) in the impugned order, emphasized that the Appellant have paid duty on the discounted price, they have not produced any evidence to show that the discounts had been passed on to the buyers and that the deduction of discount is not admissible and the same were not passed on at the time of sale. 5. We have carefully considered the submissions from both the sides and perused the records. The dispute in thi....

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....in some cases while the deduction of trade discounts from the assessable value was claimed, the discount was not passed on at the time of clearance but was passed on later on by issuance of credit notes and, therefore, the deduction of such trade discount is not admissible as for admissibility, the same should have been passed on to the customers at the time of clearance, not later on. 6. When the show cause notice itself states that in the cases where the deduction of trade discount is sought to be disallowed, the discounts were passed on later on by issue of credit notes to the buyers and there is no allegation that the credit notes are bogus, it has to be accepted that the trade discounts were passed on to the buyers but not at t....