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2013 (10) TMI 260 - AT - Central ExciseValuation - Provisional Assessment - Assesse manufacture laminated sheets of different shapes and designs which were chargeable to Central Excise duty under sub-heading 4803.90 of the Central Excise Tariff - Discount Through Credit Notes - there was no dispute that this discount was for damage of the goods during transit after ex-depot sale – Held that:- The deduction of damage discount being in the nature of refund or benefit to the buyer by the way of compensation for damage, breakage or loss suffered by the goods after removal from the factory, was not permissible – following CCE, New Delhi v. Vikram Detergent Ltd. [2001 (1) TMI 84 - SUPREME COURT OF INDIA] - Commissioner (Appeals)’s order permitting the deduction of the damage discount was incorrect was liable to be set aside. Deduction of Rebate and Similar Claims - Held that:- Commissioner (Appeals) had gone wrong in permitting the deductions of the special discounts, as it was not known as to on the basis of which criteria those buyers had been treated as a different class of buyers - the Commissioner (Appeals)’s order permitting deduction of special discount under the “rebate and similar claims” head was not sustainable and was liable to be set aside – following Metal Box India Ltd. v. CCE [1995 (1) TMI 380 - SUPREME COURT] - When the different prices were fixed by an assesse for different classes of buyers by the way of different trade discount, there must be some rational criteria for classification of the buyers and arbitrarily treating some buyers as special customers for higher trade discount was not correct - the criteria for classification of the buyers and the trade discount for different classes of buyers must be known before the clearance - The discounts given on discretion after the sale for which the criteria was not known prior to the sale, would not be admissible. Whether deduction of “packing and forwarding charges” was to be allowed, the packing and forwarding charges were mainly expenses incurred on packing of the goods sold from the depot - Held that:- The Commissioner (Appeals) in the order had not given any finding on the issue and had simply disallowed its deduction - Therefore, on this point, the matter needed to be remanded to the Commissioner (Appeals) the issue was required to be decided in accordance with the Apex Court judgment in the case of U.O.I. v. Godfrey Philips India Ltd [1985 (9) TMI 90 - SUPREME COURT OF INDIA]. The Commissioner (Appeals)’s order allowing the deduction on account of damage discount (discount through credit notes) and special discount to special customers (rebate and other claims) was set aside and on the points the order passed by the original Adjudicating Authority was restored and as such, the Revenue’s appeal was allowed.
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