Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2023 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 538 - AT - Central ExciseValuation - Nature of discount offered to Distributors and not to other buyers - two sets of assessable value for the same product - the higher value in case of direct sales and discounted value for the clearances made to distributors - inclusion of expenses with regard to installation and after sale service during the warranty period in the assessable value - HELD THAT:- Section 4 essentially seeks to accept different transaction value which may be charge by an assessee from it different buyers. For assessment purpose so long as this are based upon purely commercial consideration where buyer and seller have no relationship and the price remains sole consideration for sale. This way it enables valuation of goods for charging excise duty on value charged per commercial invoice rather than for notionally determinative value. The discount which have been offered in the present case is well known to the customers which are distributors of the appellant as same is being mentioned in their distribution agreement - it is an establish practice now that discounts of any description given on any normal price payable for any transaction and same will not form part of the transaction value of goods. The discount is not being given in the form of a reimbursement for distributors undertaking installation and after sale services during the warranty period . Since both the activities are beyond the place of removal and post sale activities and therefore it is not a liability of the manufacturer assessee to undertake such activity. Thus, we are of the view that it is wrong on the part of the department to assume that distributors are being compensated in the form of discount for the expenditure which they have incurred on undertaking installation and after sale service during warranty period. It has also been held under the various decisions of this Tribunal that such expenditures are not includable otherwise also in the assessable value. In this regard reliance placed in Tribunal decision in the case of GENERAL MOTORS INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE – I [2022 (4) TMI 1539 - CESTAT MUMBAI]. The issue under consideration has already been settled by Hon’ble Supreme Court in the case of M/S. PUROLATOR INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI – III [2015 (8) TMI 1014 - SUPREME COURT] which have also been followed by this Tribunal in the case of M/S. BIOCHEM PHARMACEUTICAL INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III [2016 (3) TMI 664 - CESTAT MUMBAI] where it was held that quantity discount was correctly claimed by the appellant as the same was claimed at the time of sale of the goods. It is found that since the sale invoice which have been issued to the distributors by the appellant offering 15 % discount is normally a trade discount and the department has failed to discharge its responsibility to establish that there has been any flow back of consideration from buyer to the appellant. Thus, the transaction value declared by the appellant is correct assessable value for the payment of central excise duty and discount cannot be added to the assessable for charging central excise duty. Appeal allowed.
|