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2023 (9) TMI 177 - CESTAT KOLKATADemand of differential duty - finalization of provisional assessment - deduction of distributors’ discount as provided in the contract - it is the contention of the respondents that the assessable value has to be determined on normal transaction value after allowing the distributors’ discounts and other discounts, such as, quantity discounts, cash discounts, PME etc. - HELD THAT:- The adjudicating authority held that in terms of the agreements entered into between the respondent and the distributors, the respondent has imposed such conditions on the distributors, which meant that the distributors were being controlled in all respects by the respondents. In effect, the distributors were the agents of the respondents. There was no question of deduction of the discounts payable by the respondent to the distributors. Further, the goods could be assessed to duty on the value which could be determined under Section 4 (1)(a) of the Central Excise Act, 1944. Thus, it is not necessary to charge the duty on the normal transaction value as claimed by the respondents. Further, in view of the relationship of the distributors as that of agents, the deduction of discounts claimed by the respondents for various calendar years was not permissible. However, the respondent was entitled to deductions on account of cash discounts, quantity discounts, PME etc. In terms of the agreement with the distributors, the goods were purchased by the distributors at the rates fixed by the respondents from time to time and it is expressly provided in the agreement that all the transactions between the respondent and the distributor are on principal to principal basis and nothing in the agreement shall constitute or be deemed to constitute by either party as the agent of the other - the valuation of the goods cannot be done in terms of 4 (1)(a) of the Central Excise Act, 1944 as the goods are not sold for delivery at the time and place of removal, the time of removal being the time at which the goods were cleared from the factory. In this case, the sale of the goods from C & F Agents, premises is at a time , which is subsequent to the time of removal i.e. subsequent to the time at which such goods have been removed from the factory. Therefore, the valuation of goods shall be governed by Section 4(1)(b) of the Act and the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - the valuation of the said goods is to be done under 4(1)(b) of the Central Excise Act, 1944 i.e normal transaction value. The respondents are entitled to deductions of discount as claimed from the value of the goods and the ld. Commissioner (Appeals) has gone through the issues and held so - there are no infirmity with the impugned order and accordingly, the same is upheld - the appeals field by the Revenue are dismissed.
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