1980 (2) TMI 259 - Commissioner - Central Excise

Summary

Issues:
1. Disallowance of off-season discount and publicity expenses by the Assistant Collector of Central Excise.
2. Appeal filed by the appellants challenging the disallowance.
3. Interpretation of off-season discount and publicity expenses in relation to assessable value.
4. Applicability of Supreme Court judgment on selling expenses to the case.
5. Submission of balance sheet and certificate by the appellants to support their claim.
6. Decision on the appeal by the Appellate Authority.

Analysis:

The case involves the disallowance of off-season discount and publicity expenses by the Assistant Collector of Central Excise, which the appellants contested in their appeal. The appellants argued that off-season discount is a common trade practice in the fan industry and should be allowed uniformly to all buyers. They also relied on a Supreme Court judgment regarding the exclusion of selling expenses from assessable value. Additionally, the appellants presented their balance sheet and a certificate from their Chartered Accountants to support the claim of publicity expenses incurred during the relevant period.

Regarding the off-season discount, the Appellate Authority found that the lower authority did not provide any valid reasons for disallowing the claimed discount. It was established that off-season discount is a normal trade practice in the fan industry and should be allowed if uniformly available to all buyers as an additional trade discount. Therefore, the Appellate Authority allowed the off-season discount claimed by the appellants.

In the case of publicity expenses, the Appellate Authority referred to a judgment by the Andhra Pradesh High Court, which recognized certain post-manufacturing expenses as deductible from the assessable value. The appellants submitted evidence of the publicity expenses incurred, supported by a certificate from their Chartered Accountants. The Appellate Authority noted that the claimed amount of publicity expenses per fan was slightly lower than the actual amount calculated by the Chartered Accountants. However, based on the High Court judgment, the Appellate Authority allowed an abatement towards publicity expenses, not exceeding the amount claimed by the appellants, once the Lower Authority verifies the actual expenses incurred.

In conclusion, the Appellate Authority allowed the appeal of the appellants concerning the off-season discount and directed the allowance of an abatement towards publicity expenses, subject to verification by the Lower Authority.