TaxTMI 
TaxTMI 
2017 (3) TMI 1931
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 provisional assessment on clearances from the factory to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itted 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 hearing of an appeal, grant time, from time to time, to the parties or any of them and a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nces 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 discounts are not eligible for deductions." As per Section 4(3)(d), "Transaction Value" means the actual amounts paid or pay....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 their depots and the subsequent discounts passed on by the assessee to the buyers should be includable in the value of goods cleared from their factory. Thus the assessee wrongly r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ified 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 Industries Vs. Dy. Commr. Of C.Ex. & S.T., Durgapur DIV-I reported in 2015 (323) E.L.T. 508 (Cal.) has allowed the writ petition giving the benefit of provisional assessment to the petitioner. Learned senior counsel ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 opportunity of hearing. At the time of hearing, the parties are at liberty to rely on judgments and orders in support of their contentions and the Deputy Commissioner in his reasoned order shall deal with the same. 9. it is made clear that pendency of the applications for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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 the face of each invoice, it is known to all the Madras Rubber Factory dealers. The discount cannot indeed be shown in the invoice for the simple reason that the discount is known only at the end of the half year. 49. The Assistant Collector allowed the said claim on the finding that this discount is given with a view to encourage th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 and understood at the time of removal of particular goods, though the amount is quantified later. In view of the said finding and in the light of the clarificatory Order in Bombay Tyre International, we hold that this claim has been rightly allowed by the Assistant Collector. 54. So far as the prompt payment discount is concerned, it is payable under a scheme called 'prompt ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der 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 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 accounts 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....clared 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 unrelated buyers if extended can not be objected to and different actual prices paid or payable or various transactions are to be accepted for working assessable value. Where the assessee claims that the discount of any description for transaction is not readily known but would be known only subsequently- as for example, year end discount- the assessment for such transactions may be made on a provisional basis. However, the assessee has to disclose the intention of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 an Act are challenged. This class of cases we are mentioning by way of illustration and should not be understood to be an exhaustive exposition of law which, in our opinion, is neither practical nor possible to state with precision. The availability of alternative statutory or other remedy by itself may not operate as an absolute bar for exercise of jurisdiction by the courts. It will normally depend upon the facts and circumstances of a given case. The further question that would inevit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rther 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 fundamental in character and need not have been put through the mill of statutory appeals in the hierarchy. For this reason alone, we set aside the respective impugned orders of the High Courts and remit the writ petitions back to them for decision in accordance with law. The recovery of tax would stand stayed till the disposal of the writ petitions. Ordered accordingly. It is true that for maintainability of a writ petition alternative remedy is not a bar but when to invoke the extra ordinary jurisdiction under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 of India to issue prerogative writs, orders and directions within their territorial jurisdiction to ensure enforcement, extension and protection of the fundamental, constitutional and other legal rights of the subjects. The remedy given under Article 226 being discretionary is subject to several checks. The checks mostly are self-imposed and as a rule of policy with a view that extraordinary remedy should always be exercised in extraordinary circumstances only. The remedy given must not be treated at par or alike other statutory remedies. A p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ferior 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 has the power to do so and may and should exercise it." The law laid down by Hon'ble the Apex Court in State of U.P. v. Mohammad Nooh (supra) still holds the field and in view of the law laid down a writ in the nature of certiorari can be issued even if a remedy of appeal/revision is available on arriving at a conclusion that an inferior court or Tribunal of first instance has committed an error so patent that may not be cured or obliterated by adopting the other statutory remedy. The doctrine of availability of alternative remedy may also be ignored, i....