TaxTMI 
TaxTMI 
2017 (9) TMI 1490
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.... for common disposal. 2. The facts of the case are that M/s Sirpur Paper Mills, the respondents herein, are engaged in the manufacture of paper and paper board falling under chapter 48 of Central Excise Tariff Act, 1985. Respondents file refund claims for grant of refund of duty on quantity discount given to their wholesale dealers as an incentive, by way of credit notes. The Dy. Commissioner of Central Excise processed the claims and sanctioned refund amounts under section 11-B of Central Excise Act, 1944, by way of cenvat credit to the respondents. On appeals, department filed appeals against these orders before the Commissioner (Appeals), who filed impugned orders upholding the orders of the original authority and rejected department ....
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....es up for appellate decision in this matter is firstly, whether the impugned refund claims against quantity discount given by respondent are eligible for refund and secondly, whether the amounts claimed are hit by unjust enrichment. 6.1. The issue is of grant of quantity discount was amply clarified by CBEC in their circular No.F-354/81/2000 (TRU), dated 30.06.2000. The relevant portion of this circular is reproduced for ready reference: As regards discounts, the definition of transaction value does not make any direct reference. In fact, it is not needed by virtue of the fact that the duty is chargeable on the net price paid or payable. Thus if in any transaction a discount is allowed on declared price of any goods and actually passe....
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....r, the nature and quantum of discount should be known at the time of sale of the goods and further they should have actually been passed on to the buyers goods. The circular also takes into account the practice of year end discount, however, in such cases the transactions have to be assessed on a provisional basis. 6.3. From the facts on hand, it emerges that the quantity discount was offered by respondents to all wholesale dealers, but the quantity and amount would vary from party to party and area to area as agreed, before lifting the material. The show cause notice has, in fact taken cognizance of the letter of their Vice President (Mktg), introducing quantity discount with features threof. Thus, in all these cases, the nature of quan....
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....at refund claim thereon was not hit by unjust enrichment. However, we find that both Addison & Co. Ltd judgment of Hon'ble High Court of Madras as well as the Dharmsai Morarji Chemicals Limited decision has been set aside by Hon'ble Supreme Court in the cases of CCE Madras vs. Addison & C. Ltd. [2016(339)E.L.T 177 (S.C.) and CCE Vs. Dharmsai Morarjee Chemicals Ltd reported in [2016(241)E.L.T A 154 (S.C)]. The ratio laid down by Apex Court in the Addison judgment was that trade discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price and that when turn-over discount is known to the dealer at the time of clearance, assessee is entitled for filing a claim for refund, on ....