2006 (11) TMI 85

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....bes falling under Chapter Heading No. 48.19 of CETA, 1985. They were not reversing the excess Modvat/Cenvat credit availed on the raw materials because of trade discounts passed on by their supplier at later stage. It is alleged by the department that after giving discount the transaction value changed, and resulted in payment of reduced duty. This amounted to excess credit passed on to the appellant to the extent of differential duty calculated on the discount amount. The department further alleged that the appellants raised debit notes to the suppliers and suppressed the same with intent to avail excess Modvat/Cenvat credit on the invoices of the goods received at higher value. 3. Show cause notice was issued by the jurisdictional Assi....

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....nputs. There was no question of any excess credit or unauthorized credit because there was no other evidence produced by the department to indicate that the assessee or supplier had not paid or short paid duty at the end of the month, as per the provisions of the Rules. The assessable value declared by the assessee in their Central Excise Invoices had not been the subject of dispute at all. The trade discount depends upon various commercial aspects. It may be given before the assessment of the goods to the payment of duty, or may be given after payment of duty, depending upon the terms and conditions, mutually agreed between the supplier and the buyer. In certain cases, trade discount is conditional, example it may be related to the quantit....