1997 (7) TMI 269 - AT - Central Excise

Summary

Issues:
- Disallowance of claimed discount on goods supplied to wholesale dealers.
- Discrepancy in discount claimed and filed price lists.
- Applicability of discount on goods supplied under contract.
- Duty payment based on approved price lists.

Disallowance of claimed discount on goods supplied to wholesale dealers:
The appellant had filed different price lists for supplies to their sole distributors and wholesale dealers, claiming a 20% discount for the former and a 15% discount for the latter. The Department objected to the appellant clearing goods to wholesale dealers and paying duty after deducting the higher 20% discount. The dispute arose because the appellant was held ineligible for claiming the 20% discount for supplies to wholesale dealers. The appellant argued that the higher discount was actually passed on to the wholesale dealers and questioned the Department's stance on disallowing the higher discount solely based on the absence of a price list claiming such a discount.

Discrepancy in discount claimed and filed price lists:
The appellant's counsel contended that the Department's disallowance of the 20% discount was unjustified as the discount had been passed on to the wholesale dealers, even though the price list only claimed a 15% discount for those supplies. The Departmental Representative argued that the 20% discount was applicable only to supplies made under a specific agreement with a distributor, and since no such agreement existed for other wholesale dealers, the higher discount was rightly disallowed. The Tribunal noted that the adjudicating authority had disallowed the entire 20% discount instead of limiting it to the 15% discount claimed in the price list for supplies to wholesale dealers.

Applicability of discount on goods supplied under contract:
The Departmental Representative emphasized that the 20% discount was claimed for supplies made under a contract with a specific distributor, and the appellant should have filed a separate price list for such supplies. The Tribunal observed that while the appellant did not file a price list claiming a 20% discount for supplies to wholesale dealers, there was no finding that the actual discount of 20% was not given to the buyers. The Tribunal highlighted the importance of filing appropriate price lists before removing goods and paying duty based on the approved prices.

Duty payment based on approved price lists:
The Tribunal concluded that the appellant's act of availing a higher discount and paying duty on a lower value than the approved prices violated Rule 173Q(1)(a), which pertains to removal of excisable goods contrary to the rules. While setting aside the duty demand ordered by the Additional Collector, the Tribunal reduced the penalty imposed on the appellant to Rs. 5,000. The impugned order was modified to reflect this decision, partially allowing the appeal.