TaxTMI 
TaxTMI 
1985 (3) TMI 72
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....s are similar, it is sufficient to refer to the facts in one case. viz. W.Ap. No. 435 of 1978. The respondent in each of these appeals is manufacturer of embroidered cotton fabrics. They are assessable to excise duty under Item 19-II of the First Schedule to the Central Excises and Salt Act, 1944, hereinafter referred to as the Act. Upto 30th November 1973, the respondents were paying Central Excise duty at ad valorem basis. From 1-12-1973, they opted to pay duty at compounded rates under Rule 96-J of the Central Excise Rules. Under Sec. 4(a) of the Act, before its amendment the value of an article is the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of removal of the ....
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....stant Collector, the respondents preferred an appeal to the Appellate Collector. However, the said appeal was rejected on 12-12-1973. Thereafter, a revision was filed before the Government of India, who by their order dated 29-8-1975 rejected the same. It is at that stage the respondents have come before this Court seeking to quash the order of the Government of India affirming the orders passed by the authorities below. The ground on which the trade discount which was originally allowed was withdrawn by the authorities is only on the basis that the trade discount has not been uniformly allowed to all the purchasers. One further ground that was urged at the stage of the writ petition on behalf of the Department is that the trade discount ca....
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.... the Act. But Corpus Juris Secundum Volume 26-A, page 974, contains a definition of 'trade discount' as under : - "The term 'trade discount' means the difference between the seller's list price and the price at which he actually sells goods to the trade; a percentage deduction from the regular list or catalogue price of goods." The Supreme Court in the case of Voltas Ltd., 1977 E.L.T. (J 177) has held that trade discount is a percentage deduction from the regular list of catalogue price of goods. Thus trade discount normally means a deduction or reduction from the catalogue price of goods allowed by the wholesalers to retailers in the trade. The Supreme Court has held in the above case that trade discount need not be uniform and that ....
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....discounts shall not be disallowed only because they are not payable at the time of each invoice or deducted from the invoice price." The above decision is a clear authority for the proposition that the cash discount cannot be disallowed merely on the basis that the discount is not allowed at the time of the sale of the articles but at a later point of time as has been done by the authorities below. 6. Coming to the question as to whether the appellants are right in making a distinction between a trade discount and cash discount, it is seen that the Supreme Court proceeded on the basis that the trade discount, by whatever name it is described, should be deducted from the sale price if such discount was known to the purchaser prior to t....