TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 876
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.... gate as well as stock transferred to the depots for further sale therefrom. The Appellant transfers goods from its Factory to the various depots across the country by discharging duty on the value arrived at in terms of Rule 7 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000 (hereinafter referred to as the 'Valuation Rules'). While arriving at the value for the purpose of clearance of the goods from the depot, as per Rule 7 of the Valuation Rules, the appellant claims deductions towards the following discounts: i) Trade Discount, ii) Quantity Discount iii) Extra Discount iv) Special Discount v) Turnover Discount and vi) Cash Discount. 1.2. The Appellant allows Trade Discount and Quantity Discount to all its customers on the invoices issued from the depots. The Turnover Discounts are allowed only to those customers who achieve the stipulated quantum of purchases fixed in terms of the circulars issued by the appellant. The cash discount is allowed to those customers who make timely payments. Special discount is allowed in consideration of other commercial contingencies. In some ca....
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.... Feb 10 01/DC/CE/BPD/2010-11 43,21,153.57 7,08,750.00 1,01,674.00 Mar'10 02/DC/CE/BPD/2011-12 54,75,340.73 7,65,609.00 97,620.00 TOTAL 2,82,63,534.48 33,86,071.00 4,20,771.00 1.5. The said Notices were adjudicated by the Ld. adjudicating authority, wherein the demands of duty raised in the Notices were confirmed along with interest. 1.6. On appeal, the Ld. Commissioner (Appeals) decided the issue by means of seven Order-inAppeal. However, the Ld. Commissioner (Appeals) issued a single consolidated order confirming the demands made in all seven adjudication orders. Thus, the appellant has preferred seven appeals before this Tribunal, which are the subject matter of these seven appeals. 2. The appellant submits that in the Orders-in-Original, the Ld. adjudicating authority has disallowed all discounts claimed by them, on the ground that they were merely notional and not supported by evidence showing actual passing of such discounts to buyers. Consequently, the Ld. Adjudicating authority has recalculated the assessable value without considering discounts. The appellant submits that before the Ld. Commissioner (Appeals) ....
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.... servicing, warranty, or commission are includible in the assessable value, while trade discounts actually passed on to buyers are deductible. 2.3. In support of their contention, the appellant relied on the landmark decision in the case of UOI v. Bombay Tyre International Ltd. [1983 (14) ELT 1896 (SC)], wherein the Hon'ble Supreme Court has held that only those expenses which enhance the value or marketability of goods up to the point of sale are includible in assessable value, whereas trade discounts and transportation costs beyond the factory gate are deductible. Section 4 of the Central Excise Act, effective from 01.07.2000, codified this principle by defining "transaction value" in Section 4(3)(d), limiting inclusion to amounts the buyer is liable to pay in connection with the sale. The Bombay High Court in Tata Motors Ltd. v. UOI [2012 (286) ELT 161 (Bom.)] affirmed that the amended Section 4 retains the same valuation principles as earlier law. Accordingly, discounts known prior to or at the time of removal-whether granted through invoices or credit notes-are permissible deductions under the transaction value regime, as reaffirmed by the Supreme Court in Bombay Tyre Inter....
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.... the relevant period, on their own ascertainment, has not been taken into account by the Ld. Adjudicating authority. As the said amount has not been appropriated as the payment towards their liability, they have paid an additional amount of Rs.15,72,748/- as pre-deposit through GAR7 challan, for the purpose of filing these appeals. Since the impugned demands are unsustainable and liable to be set aside, the appellant prayed for passing an order directing the refund of the pre-deposit amount of Rs.15,72,748/- to the Appellant, in terms of Section 35FF of the Central Excise Act, 1944, along with applicable interest from the date of deposit till the date of actual refund. 2.8. In view of the above submissions, the appellant prayed for allowing the discounts and setting aside the impugned orders. 3. The Ld. A.R. reiterated the findings in the impugned order. 4. Heard both sides and perused the appeal documents. 5. We observe that the Appellant, a multilocational manufacturer of plywood, transfers goods from its factories to various depots on a stock transfer basis, from where sales are made to customers. Various discounts such as trade, quantity, turnover, project, and cash....
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....spects. As a reduction of sale price indicated in the sale invoice or by issuance of a credit note. Before removal of goods from factory Project Discount This discount is allowed by Greenply to dealers for making the sales to specified projects. As a reduction of sale price indicated in the sale invoice or by issuance of a credit note Generally, project discounts are announced before the removal of goods from the factory. However, in certain cases, this discount may be made known to dealers after the removal of goods from the factory but before the goods are sold to the customers from the depot Scheme Discount Greenply offers certain discounts to its dealers based upon the schemes introduced by the Head office/ branches offices. As a reduction of sale price in the invoice or by issuance of a credit note Generally, scheme Discounts are announced before the removal of goods from the factory. However, in certain cases, this discount may be made known to dealers after the removal of goods from the factory but before the goods are sold to the customers from the depot Turnover Discount This discount is offered by Greenply to its dealers on achievement ....
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....se of UOI v. Bombay Tyre International Ltd. [1983 (14) ELT 1896 (SC)], wherein the Hon'ble Apex Court has held that only those expenses which enhance the value or marketability of goods up to the point of sale are includible in assessable value, whereas trade discounts and transportation costs beyond the factory gate are deductible. 5.5. We observe that Section 4 of the Central Excise Act, effective from 01.07.2000, codified this principle by defining "transaction value" in Section 4(3)(d), limiting inclusion to amounts the buyer is liable to pay in connection with the sale. The Bombay High Court in Tata Motors Ltd. v. UOI [2012 (286) ELT 161 (Bom.)] affirmed that the amended Section 4 retains the same valuation principles as earlier law. Accordingly, we observe that discounts known prior to or at the time of removal, whether granted through invoices or credit notes, are permissible deductions under the transaction value regime, as reaffirmed by the Supreme Court in Bombay Tyre International Ltd., which held that trade discounts are deductible even if not adjusted at the time of each invoice. 5.6. Thus, we observe that the applicability of the Bombay Tyre International Ltd. r....
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....transaction is conducted on a principal to principal basis. Therefore, the various discounts reflected in invoices and credit notes, being known at the time of sale and duly passed on, are eligible deductions. The relevant part of the said Circular is reproduced below: 9. Is cash discount an admissible deduction? Since valuation is now based on "transaction value" the cash discount, if actually passed on to the buyers, will be allowed as deduction, the transaction being on principal to principal basis. 5.8. In the present case, we observe that all discounts, whether shown on invoices or allowed through credit notes, have been genuinely passed on to buyers, as evidenced by party ledgers, payment records, and discount policies furnished with the appeal. These discounts were known prior to or at the time of removal, satisfying all requirements of Section 4 and the CBEC circular. Therefore, we hold that disallowance of these legitimate deductions and the consequent demand of differential duty are contrary to the law and binding departmental instructions. 5.9. We also find that the appellant has submitted Chartered Accountant Certificate issued by BLA& Associates certifyi....
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....aterial Dasy. Amount 6.00 40 119.08 179.62 447.00 $m 33226.76 9.00 12.00 140 345.30 @23.07 568.00 5g 207774.40 108.95 446.55 917,00 Sqm 50 106725.45 19.00 110 327.47 1555.48 1000.00 Sqm 353667.60 460 961.10 1003.72 721396.23 Trade Discount! 10.00- Cty. ftarmonti 4.00- Spel. Discount ! 13.41- 129852.32- 23661,79- 14153.13- Extra Placounty 4,75 22357.17- Sub-total : Total Qty : 443372.88 460 961.20 3003.32 4:0372.00 Bounding off 14.00 65372,20 VAT 0.00 Total: 523945.00 Total Invoice Value : 533945.00 Tutal Invoice Value LA words | Five Lakh Thirty Three Thousand Nine Bandired Forty Five Bupons enty Certified that the particulars direk above are trin 4 curiedt and the amount Endissind representa the price actaully eheryed arsi that there is so Flow of additional consideration dizvetly or indirectly frus the liget. Document 2 BLA & ASSOCIATES CHARTERED ACCOUNTANTS 2, LALA LAJPAT RAI SARAN KALYAN BHAWAN GROUND FLOOR KOLKATA - 700 020 (W.B ) # 033-2287 4116 / 4066 4343 E-mail bÃa_associates@yahoo Do i) CA ANNEXURE- 13 353 TO WHOM SO EVER IT MAY CONCER....