TMI Blog2004 (5) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case are that M/s. Nilkamal Plastics, Pondicherry, the respondents herein are engaged in the manufacture of Plastic moulded furniture falling under chapter sub-heading 9401.00, 9403.00 and Plastic crates falling under chapter sub-heading 3923.90 of the CETA, 1985. As a uniform industry practice the entire Plastic Chair Manufacturing industry had decided not to accept the rejected goods if any returned by their buyers. It was also decided to increase the discount allowed to the customers by 1% to 2% at the time of clearance of the goods irrespective of the level of rejection. The said discount was given as an additional discount and the assessee-respondents declared the same in the declaration filed under Rule 173C(3A) clearly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court in the case of CCE v. Hindustan Lever Ltd. reported in 2001 (130) E.L.T. 721 (S.C.) wherein it was held that discount on account of damages are not allowable. The said judgment has relied upon the earlier judgments of the Apex Court in the case of Assistant Commissioner v. MRF Ltd. reported in 1987 (27) E.L.T. 553, CCE v. Vikram Detergent reported in 2001 (127) E.L.T. 641 (S.C.) and Govt. of India v. MRF reported in 1995 (77) E.L.T. 433 (S.C.). The Commissioner (Appeals), in the present case has overlooked the decisions of the Hon ble Supreme Court cited supra, argued the learned JDR. He, therefore, prayed for allowing the Revenue appeal. 4. Heard Shri Nitin Mehta, learned Counsel for the respondents. He has submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of the new tyre, the amount which has been found remittable to the customer is deducted and the asssessee collected only the balance price. It was in those circumstances, Hon ble Supreme Court has noted that the damage discount was only a claim for refund by the buyer for the manufacturing defect in the tyre sold by the assessee, which was being honoured by the assessee in a manner acceptable to both the parties and the Court held that the nature and the character of the amount so being refunded was certainly not a trade discount contemplated by Section 4(4)(d)(ii) of the C.E. Act, 1944. In the case of CCE v. Vikram Detergent Ltd. reported in 2001 (127) E.L.T. 641 (S.C.), the Hon ble Apex Court has held that .....It is in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is clarified as under : As regards the discounts, the definition of transaction value does not make any direct reference. In fact, it is not needed by virtue of any fact that the duty is chargeable on the net price paid or payable. Thus if in any transaction a discount is allowed on a declared price of any goods and actually passed on to the buyer of the goods as per common practice, the question of including the amount of discount in the transaction value does not arise. Discount of any type or description given on any normal price payable for any transaction will, therefore, not form part of the transaction value of the goods. What is important is that it must be established that the discount for a given transaction has actually b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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