TaxTMI 
TaxTMI 
2017 (3) TMI 1931
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....itioner under the Central Excise Act. In order to appreciate the controversy, briefly the facts giving rise to the present writ petition are that the petitioner company is having its registered office at Kankroli and is engaged in the business of manufacture and sale of tyre, tubes & flaps falling under Central Excise Tariff Act, 1985. It has been contended by Mr. M.S. Singhvi, learned senior counsel that the petitioners are engaged in this trade for a number of years and are selling excisable goods partly by way of direct sale to the customers from the factory and partly through their outside depots / C & F agents spread throughout the country. For this purpose, the goods are cleared from the factory to the depots/C & F agents as stock transfer on payment of duty but the goods are actually sold to the customers from the depots / C & F agents. He submits that in case of sales through depots / C & F agents, the clearances of tyres, tube and flaps from the factory are made on provisional basis under rule 7 of Central Excise Rules, 2002 since March, 1997 on the request of the company. Learned senior counsel submits that it is a trade practice in tyre industry to adopt provisiona....
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.... to the maintainability of the writ petition and has submitted that the present writ petition is against the order of Assistant Commissioner and as per Section 35 of the Central Excise Act, 1944, there is an equally efficacious alternative remedy of appeal to the Commissioner and therefore, the writ petition is liable to be dismissed on the ground of alternative remedy. Section 35 of the Central Excise Act, 1944 which reads as under:- (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer lower in rank than a ^2[Commissioner of Central Excise] may appeal to the ^3[Commissioner of Central Excise (Appeals)] [hereafter in this Chapter referred to as the ^1[Commissioner (Appeals)]] ^4[within sixty days] from the date of the communication to him of such decision or order: ^5[Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.] ^6[(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hear....
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....e goods to the depot the actual price/transaction value on which the duty has to be paid is not known hence the clearances made from the depots have to be assessed for duty as per section 4(1)(b) of CEA 1994. The moot point comes to my mind is as to whether the deduction of discounts would be admissible if there is no evidence showing that the same has actually been passed on to the customer. In this case the entire sale of the assessee taken place through depots where the goods are first stock transferred, that in such a situation, as per the provision of Rules 7 of Central Excise valuation Rules, 2000, the assessable value of the goods would be the sale price of the goods prevailing at the depot at the time of removal. Since discounts are not given at the time of sale, but are determined at a later date, their deduction is not permissible for determining the assessable value when the assessee is not in a position to show that the discounts whose deduction had been claimed by them on average basis has actually been passed on to the buyers. Hence, in any case they are not eligible for their deduction for the reason that the buyers are not meeting the purchase targets; such discount....
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....articular quarter viz turn over discount, slab discount, growth discount, exclusive dealer discount, special incentive discount, trade discount etc, the quantum of which are not known at the time of billing by the assessee from their depots, are not deductable from the assessable value of goods cleared from their factory. The said discounts though are admissible, calculated and allowed in future to their dealers and quantum of such discounts are not known at the time of clearance of goods from their factory, should have to be quantified at the time of finalization of Provisional Assessment, but the duty on the similar goods cleared from their factory should have to be paid on the assessable value equal to sale value of similar goods available at their depots. Thus the amount deducted on the account of the said discounts from the assessable value at the time of clearance of goods from their factory, is against the spirit and provisions of Section 4(1)(b) of the said Act read with Rule 7 of the Central Excise Rule, 2002. 14. Thus at the time of clearance of the said goods from their factory, the duty is to be initially assessed at the sale value of similar goods available at....
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....ct, 1944 read with Rule 7 of the valuation Rules, they have to pay duty on the transaction value shown on the invoice where they may allow the abatement of upfront discounts given in the invoice as clarified vide CBEC circular No. 354/81/2000- TRU dated 30.06.2000. But the assessee vide their letter dated 10.05.2016 has expressed inability to follow the procedure as advised vide the above letter and submitted that they are unable to determine the correct transaction value at the time of removal of goods from the factory gate to depots. 18. The Commissioner of Central Excise, Udaipur has reviewed order in original No. 23/2015-16 (Prov. Ass) dated 26.02.2016 and order in original No. 24/2015-16 (Prov. Ass) dated 31.03.2016 vide Order-In-Review No. 08/2016 dated 26.05.2016 and Order-In-Review No. 09/2016 dated 01.06.2016 respectively on the grounds discussed here-in-above. Both the above Orders-In-Original have been appealed against with the Commissioner (Appeals) Central Excise, Jaipur and are still sub-judice. Learned senior counsel relying upon the judgment of the Calcutta High Court has submitted that in identical situation, the Calcutta High Court in Shyam Steel Indus....
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....the assessee to comply with them leading to protracted litigations. 25. The aforesaid ground is misconceived. The deputy Commissioner did not address the proper issues. As such, in my opinion the Commissioner rightly allowed the appeal against the order of the Deputy Commissioner. 26. In view of the aforesaid this writ petition succeeds. There will be an order in terms of prayer (a) of the writ petition. 27. The writ petition is accordingly disposed of without, however, any order as to costs." The judgment of the Calcutta High Court was challenged before the Division Bench and vide judgment reported in 2016 (331) E.L.T. 73 (Cal.) , the learned Division Bench has relegated the matter to the Deputy Commissioner by holding as under:- 8. Accordingly, Deputy Commissioner of Central Excise and Service Tax, Durgapur, the proforma respondent No. 3 is directed to dispose of the application for provisional assessment filed in terms of Rule 7 of the Rules within four weeks from the date of presentation of a copy of the certified copy of this order by passing a reasoned order in accordance with law, to be communicated to the parties after giving an opport....
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....r factory of production, the deductions as set out in this judgment and as explained in this order shall be computed and allowed on the basis of such price." (5) This order shall be by way of clarification of the judgment delivered on 7.10.1983. (6) The matters shall also be listed on 18.11.1983 and shall be heard in the Court at 2 p.m." He has further relied upon the judgment delivered in Government of India and Others Vs. Madras Rubber Factory LTD. & Ors; (1995) 4 SCC 349 which reads as under: 48. The assessee's case in this behalf is this: this is a discount granted to all dealers operating under Recurring Credit Scheme (RCS) with effect from April 1, 1980. The discount is being given on a half- yearly basis depending upon the volume of purchases made by each such dealer. Out of the total Madras Rubber Factory dealers, about eighty percent are said to be RCS dealers and out of the total sales effected by the Madras Rubber Factory, over sixty percent sales are made by these RCS dealers (as per the figures relating to the year 1981-82). The discount is being granted by issuing credit notes to dealers and though the said discount is not shown on th....
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....f the year and not at the time of actual sales". The learned Additional Solicitor General disputed the correctness of the basis on which the Assistant Collector has allowed this deduction. He commended for our acceptance the reasoning in Para 13(ii) of the judgment dated December 20, 1986 (Assistant Collector of Central Excise v. Madras Rubber Factory.) The reasoning in the said order runs thus: "The allowance of the discount is not known at or prior to the removal of the goods. The calculations are made at the end of the year and the Bonus at the said rate is granted only to a particular class of Dealers. This is computed after taking stock of the ac-counts between MRF and its dealers. It is not in the nature of a discount but is in the nature of a Bonus or an incentive much after the invoice is raised and the removal of the goods is complete. In the circumstances, we are of the opinion that MRF is not entitled to deduction under this head." 53. We are, however, of the respectful opinion that the said reasoning cannot be accepted in view of the clear finding recorded by the Assistant Collector that this system of discount is prevalent in the industry and is known....
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....e days from the date of the invoice. Under this scheme, it appears that a declaration is to be received dealer-wise and thereafter provision is to be made at the head office of MRF for the bonus. The Assistant Collector has found that this discount was allowed by the assessee not out of any extra- commercial considerations but that they were meant only to boost the sales particularly in the year 1981- 1982 in respect of Leader Tyre in order to achieve the target of sales for that year. He has recorded a finding that 'such a system of grant of discount is prevalent in normal trade practice and the only difference may be that MRF Ltd. have granted the discount only at the end of the year and not at the time of actual sales'. The learned Additional Solicitor General disputed the correctness of the basis on which the Assistant Collector has allowed this deduction. He commended for our acceptance the reasoning in para 13(ii) of the judgment dated 20- 12-1986 (CCE v. Madras Rubber Factory Ltd.) The reasoning in the said order runs thus: (SCC pp. 761- 62) 13. (ii)...The allowance of the discount is not known at or prior to the removal of the goods. The calculations are made at th....
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....notification No. F.No. 354/81/2000-TRU dated 30.6.2010 has also allowed to undertake the provisional assessment. Learned counsel has also relied upon the aforesaid notification which reads as under:- "9. 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 passed on the buyer of goods as per common practice, the question of including the amount of discount in the transaction value does not arise. Discount of any type or description given on any normal price payable for any transaction will, therefore, not form part of the transaction value for the goods, eg.. quantity discount for goods purchased or cash discount for the prompt payment etc., will therefore not form part of the transaction value. What is important is that it must be established that the discount of a given transaction has actually been passed on to the buyer of the goods. The differential discounts extended as per commercial considerations on different transactions to....
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....ssment dated 25.7.2009 and, in fact, had preferred a writ petition against the very issuance of a notice issued in terms of sub- sections (2) and (3) of Section 126 of the 2003 Act. This brings us to the question as to what is the scope of jurisdiction under Article 226 of the Constitution of India in the face of the provisions of Section 127 of the 2003 Act. 80. It is a settled cannon of law that the High Court would not normally interfere in exercise of its jurisdiction under Article 226 of the Constitution of India where statutory alternative remedy is available. It is equally settled that this cannon of law is not free of exceptions. The courts, including this Court, have taken the view that the statutory remedy, if provided under a specific law, would impliedly oust the jurisdiction of the civil courts. The High Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India can entertain writ or appropriate proceedings despite availability of an alternative remedy. This jurisdiction, the High Court would exercise with some circumspection in exceptional cases, particularly, where the cases involve a pure question of law or vires of a....
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....ue is no longer res integra and has been settled by a catena of judgments of this court, which we find entirely unnecessary to refer to in detail. Suffice it to make a reference to the judgment of this Court in Whirlpool Corpn. v. Registrar of Trade Marks where this Court was concerned with the powers of the Registrar of Trade Marks and the Tribunal under Trade and Merchandise Marks Act, 1958 and exercise of jurisdiction by the High Court in the face of availability of a remedy under the Act." He further relied upon the judgment delivered in Union of India & Anr. Vs. State of Haryana & Anr.; (2000) 10 SCC 482 which reads as under:- "3. Having heard learned counsel for the parties at length, we are of the view that these are the matter which should not have been dismissed by the respective High Courts in suggesting an alternative remedy. Th question raised was pristinely legal which required determination as to whether provision of telephone connections and instruments amounted to sale and even so why was the Union of India not exempt from payment of sales tax under the respective statutes. The respondents counter such stance. We think the question raised was fu....
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.... found favour with Justice Dipak Misra. We respectfully agree with that view." In RLW 2016 (1) Raj. 671 (Balotra Water Pollution Control & Research Foundation Trust (BWPCRT) Vs. State of Rajasthan & Ors.) a Division Bench held as under:- "On enforcement of the Constitution on January 26, 1950, the citizens of our country received a strong shield of fundamental and constitutional rights - the rights personal as well as collective. Part-III of the Constitution, that covers the fundamental rights, ensures right to equality, right to freedom, right against exportation, right to freedom of religion and cultural and educational rights. Some of the rights given are attached to each and every "person" irrespective of their citizenship. The other parts of the Constitution confers several constitutional rights to the citizens of India. All these rights would have been of no meaning, if adequate safeguard would have not been given to enforce and protect such rights. Under Article 32 of the Constitution of India, remedy to ensure and protect fundamental rights is given as a fundamental right, but a very broad discretion is given to High Courts under Article 226 of the Constitution ....
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....on appeal or revision. If an inferior court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court's sense of fair play the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it confirmed what ex facie was a nullity for reasons aforementioned. This would be so all the more if the tribunals holding the original trial and the tribunals hearing the appeal or revision were merely departmental tribunals composed of persons belonging to the departmental hierarchy without adequate legal training and background and whose glaring lapses occasionally come to our notice. The superior court will ordinarily decline to interfere by issuing certiorari and all we say is that in a proper case of the kind mentioned above it h....