TaxTMI 
TaxTMI 
TaxTMI 
2001 (1) TMI 84
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.... challenged the decision of the Customs, Excise and Gold (Control) Appellate Tribunal holding that bank charges for collection of sale proceeds and discount for damages are allowable deductions in computing the value of the manufactured goods under Section 4 of the Central Excises and Salt Act, 1944. Civil Appeal No. 2579 of 2000 : 2. In this appeal, the respondent, M/s. Vikram Detergent Ltd. is engaged in the packing of detergent powder received by it from M/s. Hindustan Lever Ltd. (HLL). After the goods are packed, they are cleared from the factory by HLL and sold through it's clearing and forwarding agents from their depots all over the country to wholesale buyers who are known as Redistribution Stockists. The Department calculated....
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....d bank charges relying on the decision of this Court in Government of India v. MRF, 1995 (77) E.L.T. 433. The respondent challenged the decision before the Tribunal. The Tribunal allowed the appeal. Both the orders of the Tribunal are now the subject-matter of challenge before us. The issues are the same in both appeals as are the relevant facts. We have heard one set of arguments and our decision disposes of both matters. 5. According to the appellant, the discount on the damaged goods could not be known at the time of their removal from the factory and as such was not admissible as a deduction on the wholesale price. It was contended that what the respondents claimed as discount was in fact a refund to the buyers for receiving goods dama....
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....to any excisable goods the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price. (3) X X X (4) For the purpose of this section, - X X X (d) "Value", in relation to any excisable goods, - (ii) does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever), allowed in accordance with the normal practice of the wholesale trade ....
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....art of the cost of transportation; it is a clear case of making up to the customer by means of a credit note the monies that it has lost on account of breakages or losses in transit." 9. The respondents sought to distinguish the decision in Surya Roshni case (supra) by contending that the claim for deduction on account of damaged goods was a claim not under sub-section (2) of Section 4 as being part of the cost of the transportation but under sub-section 4(d)(ii) of Section 4 as a trade discount. We are unable to accept the submission. 10. The object of "damage discount" is to compensate the buyer for the damaged goods and logically, compensation for damaged goods could not feature as a relevant consideration for determining the price of ....