TaxTMI 
TaxTMI 
2000 (8) TMI 85
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....except three items out of which "discount damages" was one of the items. In an appeal filed to the Customs Excise Gold (Control) Appellate Tribunal (CEGAT), the Tribunal allowed the said appeal following its earlier orders in Assam Valley Plywood Pvt. Ltd. v. Collector of Central Excise [1989 (43) E.L.T. 360] and Tungbhadra Industries Ltd. v. Collector of Central Excise [1992 (60) E.L.T. 512] and directed the original Authority to consider afresh claim for deduction in accordance with law in the light of observations contained in the said order. On remand, the original Authority again disallowed some of the deductions claimed by the respondent including the deductions in regard to damages. Having failed in the appeal before the Appellate Authority, the respondent approached the Tribunal once again and the Tribunal by the impugned order allowed the appeal of the respondent once again solely relying on its judgments in Assam Valley and Tungbhadra Industries cases (supra) and held that discount should be allowed in regard to the value of compensation paid to the buyers in lieu of damages caused to goods during transit depending on the nature and extent of damage. 2.It is against th....
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....hartered Accountants. He contended that the respondent is not relying upon the agreement referred to by the learned Attorney General for the purpose of claiming the deductions in question. 5.We will first deal with the objection of Shri Divan which is in the nature of a preliminary objection. As noted, he contended that the issue in question is finally decided inter se between the parties in an earlier proceedings which was not challenged by the Department; therefore, so far as the parties to these appeals are concerned, the matter stands concluded and the parties cannot reopen the said issue. It is true that this issue was decided by the Tribunal in the earlier round of litigation primarily relying upon two orders to which we have already made reference; the correctness of that finding was not challenged in this Court because the matter stood remanded to the original Authority. Inspite of this finding of the Tribunal, the parties again joined issue before the original Authority on this issue by producing materials like affidavits and made their submissions based on which the original Authority gave a finding against the respondent, who took the matter in appeal before the Appel....
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....emoved from the factory-gate; therefore, such a deduction is not permissible in law. He also relied upon a subsequent decision of this Court in Madras Rubber Factory case reported in [1995 (77) E.L.T. 433 (S.C.) = (1995) 4 SCC 349, at page 384] wherein this Court after referring to the judgment in the earlier case of M.R.F. (supra) held :- "As rightly pointed by Bhagwati, C.J. in the order dated 20-12-1986, "what is really relevant is the nature of the transaction" (SCC p. 760, para 8). The learned Chief Justice pointed out further that "the warranty is not a discount on the tyre already sold, but relates to the goods which are being subsequently sold to the same customers. It cannot be strictly called as discount on the tyre being sold. It is in the nature of a benefit given to the customers by way of compensation for the loss suffered by them in the previous sale" (SCC p. 760, para 8). He characterised it as "a compensation in the nature of warranty allowance on a defective tyre" (SCC p. 760, para 11). We express our respectful concurrence with the said observations". Therefore, it is contended that the claim of the respondent for deduction being one arising out of a post-m....
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....ons now sought by the respondent are similar to the insurance deductions and as a matter of fact in the instant case in effect the company is acting as an insurer of its own goods. 8.We will now consider the correctness of the Tribunal's finding based on its earlier two decisions in the cases of Assam Valley Plywood Pvt. Ltd. and Tungbhadra Industries Ltd. (supra). The Tribunal was of the view that the said decisions fully covered the issue that arose for its consideration in the impugned order. In Assam Valley Plywood Pvt. Ltd., the Tribunal at para 6 of its order held thus : "In Appeal No. E396/80A there is an additional point of dispute. It relates to the quantum of discount or reduction in value for damaged goods cleared by the appellants. The lower authorities have allowed the minimum discount of 25%. Before the Appellate Collector, the appellants claimed that they had allowed 40% to 50% discount for the damaged goods. In the appeal before us, it is contended that there was reduction of upto 75% in some cases. The appellants explained that the nature and extent of damage on different pieces of their products was not uniform and hence the price reduction for the damaged g....
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....ed by the buyers due to the damages caused to the goods. Learned Attorney General has argued that these affidavits cannot be relied upon. He also urged that the appellant has produced a copy of the agreement between the respondent and its buyers which, according to him, belied the existence of the trade practice as claimed by the respondent. Even though this document was produced only at the first appellate stage, we find it has direct bearing on the question in issue in view of the contents of clause 14 of the said agreement. Based on this clause, it is contended for the appellant that no trade practice in regard to 'damage deduction' is in existence. On behalf of the respondent, it is contended that they are not relying on the agreement to establish the trade practice; still, to rebut the argument of the appellant based on clause 14 of the agreement the respondent places reliance on clause 15 of the said agreement which, according to the respondent, creates an obligation on the respondent to compensate the buyers for the loss suffered by them due to damage to the goods. We do not want to express any opinion in regard to these arguments addressed by the parties. The authorities be....