TaxTMI 
TaxTMI 
2003 (11) TMI 127
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....alty of Rs. 50 lakhs has also been confirmed. The duty demand is in respect of refrigerators cleared by the appellant during the period from May, 1996 to 19-5-1998. The demand was raised under 9 Show Cause Notices issued on 3-12-96, 2-4-97, 27-6-97, 30-7-97, 29-10-97, 26-12-97, 23-2-98, 15-5-98 and 4-8-98. 2. The subject of dispute is the valuation of the refrigerators. At the time of original clearance of the goods, the appellant deducted the under­mentioned discounts from sale price of the goods and treated the amounts so obtained as the assessable value and discharged central excise duty at the rates applicable :- (a) Wholesale/Distribution discount (b) Service discount (c) Redistribution discount (d) ....
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....the relevant invoices in support of their contention. It has also referred to price declarations made to the Department to substantiate the submission. The remaining discounts are also passed on subsequent to sale through credit notes. During the hearing of the case, learned Counsel for the appellant has pointed out that the only discount which had not been passed on fully is quantity discount in certain cases. He submitted that these discounts were conditional to buyers purchasing targeted quantities and in certain cases where such targets were not met by the buyers, the discount was not passed on. Learned Counsel submitted that duty liability on account of such quantity discount which was not passed on, worked out to Rs. 60,52,682/-, whil....
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....ns made by both sides. It is now held that trade discounts, by whatever name described, are eligible for deduction from the price for the purpose of computation of assessable value of excisable goods. Therefore, the lower authorities were not justified in denying discounts given under certain headings. That the discounts as observed by the Commissioner (Appeals) were intended as incentive, do not detract from this position. In fact, most discounts are to gain an advantage in sale of the goods. This being purely a commercial consideration, such discounts remain in the mainstream of trade discounts. The observation that these discounts were not known at the time of sale is also not justified. This observation is without basis. The appellant h....
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....scount, service discount, cash discount and extra trade discount. Invoice No. 29, dated 13-7-96 to M/s. National Electronic Centre Pvt. Ltd. allowed distribution discount, service discount, cash discount, extra trade discount. From the above, it is clear that discounts under various headings were actually being given and these discounts were declared in the price declaration as well as in the sale documents. Thus they were known at the time of sale. These discounts satisfied the criterion for eligibility to deduction from sale price. 7. The position however, is quite different in respect of quantity discounts. Learned SDR is right in his submission that it is well settled that the extent of deduction permissible for quantity discount is th....