TaxTMI 
TaxTMI 
2019 (12) TMI 948
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....ments of Rock Phosphate through Karwar Port; out of 26 imports, 25 imports have been finally assessed based on the documents furnished by the Appellants; import effected per vessel MV Al MANSOOR-1 under Contract dated 02.03.2006 is not yet finalized; out of the 26 imports, 24 are covered under three different supply contracts; remaining two imports are individual transactions; they were availing Franchise (discount) and Quantity/Loyalty Rebate on the imports. 2.1. In all the subject 26 imports of Rock Phosphate effected by the Appellants at Karwar Port during the years 2001-2007 (up to September) Franchise as applicable at the rate of USD 0.50 PMT / 1% FOB Price and Quantity/Loyalty Rebate at the rate USD 1.00 PMT was deducted from the contracted Price agreed upon, on supply of goods in the respective contracts and the reduced amount was paid by the appellants to the supplier. Revenue contends the eligibility of such discounts and have issued a Show Cause Notice dated 28.05.2008, proposing to disallow the discounts claimed under Section 4(2) of Customs, Act,1962; seeking duty of Rs. 14,76,598 on account of discounts disallowed and allegation of excess quantity imported along wit....
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.... is unsustainable. 3.2. Learned Counsel for the appellants submits 'Quantity Discount' is a form of 'discount'; impugned Order accepts that quantity discount is a permissible reduction from the assessable value but denied the Appellant's claim on the only ground that the quantity rebate allowed retrospectively in the last shipment is improper and incorrect. The imports were undertaken with respect to a particular contract entered to with the supplier. The total quantity contracted to be shipped was imported in piece meal basis and the quantity rebate was rightly claimed only in the last of the imported shipment. Reliance is placed on the decision of Supreme Court in case of Maya Appliances (P) Ltd Vs Addl. Commissioner of Commercial Taxes, reported at 2018 (10) GSTL 6 (SC), wherein in the context was Sales Tax enactment, it was held that all trade discounts are allowable as permissible deduction and the same cannot be disallowed merely because discount was not deducted from each invoice. An assessee must establish from its accounts that discount relates specifically to sales with reference to which it is allowed and the discount must be in regular trade practice ....
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....r submits that demand raised on the ground of excess receipt is not sustainable; the difference between the quantity of excess receipt and short receipt by the Appellants is minimal; investigation has ignored the cases where the Appellants have received quantities less than the B/L quantity; in such cases, the Appellants would be entitled to a refund, if the finding of the investigation is to be accepted; the difference between the excess and short receipt by the Appellants is only 246.08 MT; department was aware that the Rock Phosphate that was imported is hygroscopic in nature and thus, it tends to absorb moisture quickly; quality specifications in the Supply Contracts had stipulated addition in the quantity of goods when imported as a result of moisture content that would account to 1% to 3% of the total quantity of the goods received; there are also possibilities of short receipt of the goods, because of its hygroscopic nature; it was agreed between the parties after considering several factors that that the quantity ordered could be plus or minus 10% as per the contract; in some shipments quantity lifted for a particular contract was less and in some cases in excess; at no tim....
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....95 (SC.) • Pusham Pharmaceuticals Company Vs CCE, Bombay - 1995 (78) ELT 401 (SC) • Ugam Chand Bhandari Vs CCE -2004 (167) ELT 491 (SC) • M/s Continental Foundation Joint Venture Holding, Naphtha HP Vs CCE, Chandigarh/i-I- 2007 (216) ELT 177 (SC) 3.6. Learned Counsel for the appellants further submits the provisions of Section 11 1(m) of the Act are not invokable in the present case as the Appellants have not mis-declared any material particulars; consequently confiscation of the consignments in question is wholly untenable; once the proposal to confiscate the goods under Section 111(m) is established to be untenable, no penalty can be imposed under Section 112(a), 114A of the Customs Act, 1962; since the demand of duty itself is not maintainable, the demand for interest under Section 28AB is also not maintainable. 4. Learned AR, appearing for the revenue, reiterates the findings of commissioner in the OIO and submitted a written brief containing the claims of the appellants and rejoinder. He submits that the impugned order was issued after detailed investigation and elaborate discussion on the factual and legal aspects of the various is....
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....ts after the expiry of the contract. (in the case of consignment imported by M V Aziza-II) • The supplier had allowed the quantity rebate to suit the needs of their buyer, though in violation of contractual terms and SCL claimed the discounts in an inconsistent manner. • Tribunal Held in Indian Aluminium Co Vs Commissioner 2003(161) ELT 1061 (Tri) that if terms of the contract not met, the discounts are deniable. 4.3. Learned AR also submits that the price declared in the commercial invoice is an adjusted price availing abnormal discounts in the guise of franchise and quantity rebate and hence it is not the actual transaction value under Rule 4 of the CVR read with section 14 of the Customs Act and hence to be rejected and re-determined as per Rules 5 to 8 of CVR; Rule 5 could not be taken as no price of identical goods imports available; Rule 6 could not be taken as data on similar goods also not available; Rule 7 and 7A also cannot be invoked; Hence proceeded under Rule 8, by using reasonable means as per the CVR; The actual and true transaction value was arrived at by adopting the basic contracted sale price by disallowing abnormal discounts, claimed....
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....e importer mis-declared value and quantity; Hence, duty demanded on these counts is in order. He submits that the roles played by Mr. Shri Umesh K. Shenoy and Shri N. D. Naik were unearthed amply from their own submissions and factual evidences like emails and other correspondences handled by them; being aware of the facts, they have filed wrong declarations before the Customs with intent to evade payment of Customs duty; hence, the penalties imposed on them are justified. 5. Heard both sides and perused the records of the case. We find that the appellants have imported 26 consignments of Rock Phosphate from M/s JPMC, Jordan under contracts. Brief issues that require consideration in the instant case are as to whether the appellants are eligible for 'Franchise Discount' and 'Quantity discount' on the imports of rock phosphate made by them at karwar port and whether extended period is invokable in the instant case. Whereas the appellants submit that the discounts are genuine; discounts under any name are to be allowed and that they have not paid over and above the contracted price. 6. Learned commissioner finds in respect of 'Franchise' discount that the contract does not defi....
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....ce. Going by the language it is a reduction in the price and it is passed on to the appellants and is adjusted in the invoice. There is no condition with reference to this discount that it will be passed on only in cases where there is short receipt and will be withdrawn in case the receipt quantity is actual or higher that the contracted quantity. In the absence of such mechanism in the contract, department cannot say that the discount is not admissible. In the absence of any condition attached to the discount, it cannot be denied on the basis of a statement of an officer of the appellants that it is for the sake of taking care of the difference in quantities. We find that Apex Court in the case of Bombay Tyre International (supra) and Purolator India Ltd (supra) held that discount, under any name, if passed on, cannot be disallowed. Going by the ratio of the cases, we find that the 'Franchise' is a discount and has been passed on to the appellants. In the absence of any allegation to the effect that supplier and appellants are related, such discount cannot be disallowed. 8. Learned commissioner observes on the issue of 'quantity discount' that the appellants have claimed the d....
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....long with the settlement of dispatch/demurrage of last shipment. We find that the dispute is with the Vessel MV Azizia-II; department claims that there are two invoices for the Vessel and they were showing different prices; the appellants contends that out of the 6800 MT, 5000 MT belong to the earlier contract for 45000 MT which was extended to these 5000 MT by virtue of Minutes of a Meeting. The department further relies on the e-mail dated 23.03.2006 sent by Sh. N.D. Nayak, Deputy Manager (Sales & Logistics) of the appellants to M/s TICL; the said e-mail reads as under: "During last shipment, Deputy Commissioner of Customs has not agreed for the adjustment of quantity rebate of USD 45000 saying such adjustment is not acceptable. After a lot of persuasion/discussion/arguments, they have as a special case accepted under protest. It means that they can re-assess during the final audit for the full value of USD 45000 in the last shipment The Department further contends that imports as per MV Lady Nora and MV Sante are not eligible for quantity discount as the imports were not under any contract. 10. As we have found above, the quantity discount was agreed upon by both the pa....