TMI Blog2010 (8) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant facts that arise for consideration are that the respondent are manufacturers of Power Capacitors and control panels. Show Cause Notices were issued to them for under valuation of excisable goods by wrongly claiming 35% trade discount supplied to customers identified by M/s. L T Ltd. The Show Cause Notice relied on the decision of Hon ble Supreme Court in the case of M/s. Seshasayee Paper Boards Ltd. v. Commissioner of Central Excise cited in 1990 (47) E.L.T. 202 (S.C.) and alleged that M/s. L T Ltd. was acting only as an indenter and hence 35% trade discount is not allowable. The adjudicating authority after examining the agreement between the respondent and M/s. L T Ltd. dropped the proceedings. 3. The Revenue aggrieved by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ern adopted by L T Ltd. It is the submission that in view of this, the deduction in the price claimed by the assessee is incorrect and cannot be termed as trade discount and is not an admissible trade discount in terms of Section 4 of the Central Excise Act, 1944. 5. Ld. Counsel, on the other hand, submits that both the lower authorities have correctly recorded factual matrix in their findings. He draws our attention to the Agreement between the assessee and M/s. L T Ltd., submitted by the respondent along with Cross Objection. He submits that the agreement clearly reads that M/s. L T Ltd. is one of the distributors and not the only distributor . He submits that the lower authorities have gone into the evidence in the form of invoices, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the respondents clearly indicate that the transaction between them and M/s. L T Ltd. is one of sale and is on Principal to Principal basis. The revenue, has no evidence for holding it to be otherwise. The payment for all the goods in terms of the Price list has been made by M/s. L T Ltd. prior to the dispatch of the goods. If M/s. L T Ltd. are merely indenters, the payment would have been made directly by the purchaser to the respondents and there would be enough justification to hold the trade discount given to M/s. L T Ltd. as service charges and apply the ratio of Seshasayee Paper Board s judgment. When the transaction between M/s. L T Ltd. and the respondents is that of sale, M/s. L T Ltd. cannot be considered as an indenter. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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