TMI Blog2009 (8) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... cate before they could get the same and produce before the Deputy Commissioner/Assistant Commissioner, he had adjudicated the case and passed the order. The Tribunal had directed the Assistant Commissioner to examine the issue afresh after taking into consideration the certificate of cost accountant and to pass an order accordingly on providing an opportunity to the appellants. Held that- that the Commissioner (Appeals) was wrong in taking lowest figures of freight and we allow the deduction as per second set of figures by the Assistant Director (Cost) which include expenses incurred upto the stage of sale of RML i.e. including freight expenses incurred by the intermediaries. Summing up all the deductions claimed by the appellants in dispute are allowed. The figures of deduction other than cleared freight shall be based on the basis chartered accountant’s report submitted by the appellants. It is also made clear that the deductions would be allowed mainly on actual figures submitted by the chartered accountant’s report. The department would be free to verify the correctness of the chartered accountant’s report if they so desire. As regards the freight, the deduction shall be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is made within stipulated period. They had issued circular in this regard extending cash discount. The ground taken by the lower authorities for denying the benefit of discount is that is not separately verifiable as to the quantum. Our attention was drawn to the chartered accountant's report wherein details of cash discount actually allowed has been worked out by the chartered accountant. As regards advance payment discount/prompt payment discount, the same has been denied on the ground that there is no uniformity in the quantum of discounts. Further in the show cause notice, it was also indicated that no such discount has been passed on. As regards uniformity in the rate of discount, the appellants relied on the decision of the Hon'ble Supreme Court in the case of Metal Box reported at 1995 (75) E.L.T. 449 (S.C.). Similarly, for prompt payment discount, the appellants relied on the decision of the Hon'ble Supreme Court in the case of Government of India v. MRF reported at 1995 (77) E.L.T. 433 (S.C.). The Hon'ble Supreme Court had held that prompt payment discount allowed is admissible for deduction since it was known prior to the removal of goods. Learned Advocate also relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated parties were never incurred and were not passed on actual customers and purchases were only manipulated and fabricated. Whereas the Commissioner (Appeals) in the impugned order has disallowed the claim for these deductions totally on different grounds altogether. Further by the very nature, advance payment discount and prompt payment discount and several incentives would not be available to all the purchasers in view of the fact that they are linked to the date of payment or achievements of certain targets or depending on quantum of purchase etc. The department would be required to show that such incentives were passed on for extra commercial consideration on the basis of evidence either in the form of statements or in the form of records. We find that the department has no evidence to show that there was extra commercial consideration. There also here is no evidence that discounts were not passed on as indicated in the SCN. It is also not the department's case that the appellant's did not follow the proper procedure of filing price list as per Rules. As regards advance payment discount, we find that such discounts have been passed on and the chartered accountant has not cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of production by the Assistant Director (Cost) before adjudication. But by the time, chartered accountant report was submitted the AC had adjudicated and passed Order-in-Original. Hence as mentioned earlier, the matter was remanded to the original adjudicating authority since he did not consider the report of the chartered accountant submitted by the appellants before passing adjudication order. However, in the present order also the report of the chartered accountant has not been taken into account by both the lower authorities. 4.3 The appellants submitted that the Assistant Director (Cost) has taken the freight expenses incurred by intermediaries on sampling basis which is unknown to the law. It is their submission that the amount of freight has to be quantified on actual basis. However, they also submitted that remand order of the Tribunal had specifically directed the original adjudicating authority to consider the report of the chartered accountant. The appellants submitted that there is no dispute that the entire freight has to be allowed as deduction. However, the department has extended lowest freight that is incurred only by RML as reflected in the report of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nless it is shown that expenses were not incurred or not genuine or there was a flow back. We also take note of the fact that even the Assistant Director (Cost) has given two set of figures for the purpose of deduction of freight. No doubt the actual freight incurred by the intermediaries has been based on sampling and not on actual details but the Assistant Director (Cost) has also explained the reason for doing the same. In view of the fact, the professional cost accountant has certified the cost incurred by the intermediaries and these expenses have been incurred after clearance of the goods and before the same are sold to the related persons whose selling price has been adopted for the purpose of determination of value under Section 4, we consider it appropriate that the expenses on freight incurred by the intermediaries firms even though they dummy has to be allowed to be deducted. 4.5 The appellants have also taken objection to the adoption of freight expenses arrived at by the Assistant Director (Cost) instead of chartered accountant's certificate submitted by them. We take note of the fact that the Assistant Director (Cost) had given a report initially which he withdrew ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
