TaxTMI 
TaxTMI 
2007 (12) TMI 158
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....t the appellants have claimed uniform discount of 12% while clearing the goods from the factory. The entire discount was not passed on to the customers and discounts were passed or. through credit notes on the advice of the marketing department to the dealer, the quantum of which, in many cases, was found to be less than 12% which was availed by them while clearing the goods from the factory. A show cause notice was accordingly issued stating that as per the Chartered Accountant certificate submitted by the appellant an amount of Rs. 4,10,78,058.00 which was claimed as discount for the period 1-5-1996 to 30-6-2000 as quantity discount was not passed on to the dealers and accordingly duty amounting to Rs. 74,82,028/- along with interest was demanded and penalty was sought to be imposed under Sec. 11AC. The show cause notice was adjudicated by the Commissioner who on the basis of revised Chartered Accountant certificate by taking in to account certain credit notes through which discount was passed on but was not earlier taken into account by the Chartered Accountant were considered and on the basis of revised Chartered Accountant certificate, which certified that the appellant has no....
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....a lesser discount and therefore, the matter was in the full knowledge of the department. Internal and CERA audits were conducted from June, 1996 to May, 2000 wherein the internal audit party has visited nine times during this period and CERA, four times during March, 1998 and March, 2001 and therefore, there was no suppression of facts. Further, in fact nine show cause notices were issued to them on the basis of scrutiny of RT 12 returns alleging that they have not passed on the discount to their customers but these notices were dropped after the adjudicating authority was satisfied that the appellants were passing on the discount to their customers through credit notes etc. In view of this the department had the knowledge that the discounts were not being passing on. A subsequent show cause notice in 2001 could not have been issued alleging suppression of facts as held by the Hon'ble Supreme Court in the case of Nizam Sugar Factory - 2006 (197) E.L.T. 465 (S.C.). Reference was invited to the decision of the Apex Court decision in the case of Chemphar Drugs & Liniments - 1989 (40) E.L.T. 276, Pushpam Pharmaceuticals Company - 1995 (78) EL.T. 401, Tamil Nadu Housing Board - 1994 (74....
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.... actually given and availed-certain discounts although originally deducted while discharging duty at the time of clearance of goods, not passed on, for the reasons of buyers not meeting purchase targets, such amounts are not eligible for deduction. This decision squarely covers the appellants case as facts are identical. Reference was also invited to the Supreme Court decision in the case of Anant Raj Industries Ltd. - 2001 (130) E.L.T. 722 (S.C.) where in a similar view was upheld and quantity discount was held to be admissible only to those buyers who purchased more than the specific quantity in a particular year. It was also submitted that the excess discount of approximately Rs. 10 crores which the appellants are claiming to have subsequently passed on has not been specified as to for what purpose they were given and what was the nature thereof and whether they related to quantity or for some other reasons and no documents for the same have been furnished. In view of this the other discounts cannot be considered even if they have been passed on subsequently as they have not been substantiated and do not relate to quantity discount as per the scheme at all. As regards limitation....
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.... the customers did not achieve the target set by them in order to be eligible to the full quantity discount. The issue is squarely covered by the Tribunal decision in the case of Electrolux Kelvinator Ltd. and Hon'ble Supreme Court decision in Anant Raj Industries Ltd. case (cited supra). Though the appellants have made a plea that the actual discount passed on by them was much more, the nature of those discounts have never been spelt out nor the manner in which these discount amounts were arrived at and the methodology of passing those discounts has not been disclosed. This has been described as discount under product scheme but what was the scheme and how it was operated and how the dealers became eligible to the same is not forthcoming and therefore the same remains unsubstantiated. Though the appellants have, during the course of hearing before us, submitted a work sheet regarding total discounts claimed by them, in which a discount of Rs. 9.21 crores has been said to have been given as a quantity discount (which included dip-counts given to the dealers in accordance with the scheme which no duty has been demanded by the department as well as discounts passed in excess of the e....