TMI Blog2013 (10) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers - the Commissioner (Appeals)’s order permitting deduction of special discount under the “rebate and similar claims” head was not sustainable and was liable to be set aside – following Metal Box India Ltd. v. CCE [1995 (1) TMI 380 - SUPREME COURT] - When the different prices were fixed by an assesse for different classes of buyers by the way of different trade discount, there must be some rational criteria for classification of the buyers and arbitrarily treating some buyers as special customers for higher trade discount was not correct - the criteria for classification of the buyers and the trade discount for different classes of buyers must be known before the clearance - The discounts given on discretion after the sale for which the criteria was not known prior to the sale, would not be admissible. Whether deduction of “packing and forwarding charges” was to be allowed, the packing and forwarding charges were mainly expenses incurred on packing of the goods sold from the depot - Held that:- The Commissioner (Appeals) in the order had not given any finding on the issue and had simply disallowed its deduction - Therefore, on this point, the matter needed to be remanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) disallowing the deduction of insurance premium and packing and forwarding charges . 2. Heard both the sides. 3. Shri C. Harishankar, Advocate, the learned Counsel for the appellant, pleaded that the appellant s sales were through depots, that the discount through credit notes is in fact discount for damage of the goods during transit after sale from depots, that this discount has been correctly allowed by the Commissioner (Appeals), that rebate and other claims are post sale discounts which also have been correctly allowed by the Commissioner (Appeals), as such discount had actually been passed on to the customers, that deduction of insurance premium has been incorrectly disallowed by the Commissioner (Appeals) in view of the Apex Court s judgment in the case of Escorts JCB Ltd. v. CCE, Delhi-II reported in 2002 (146) E.L.T. 31 (S.C.) and Prabhat Zarda Factory Ltd. v. CCE reported in 2002 (146) E.L.T. A97 (S.C.), wherein it has been clearly held that the insurance till the buyers premise cannot be included in the assessable value whether ex factory or ex-depot, and that the deduction of packing and forwarding charges has been wrongly disallowed by the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, pleaded that deduction of insurance premium and packing and forwarding charges has been correctly disallowed and that the Commissioner (Appeals) s order permitting the deduction of damage discount and discount under the head rebate and other claims is incorrect. 5. We have carefully considered the submissions from both the sides and perused the records. 6. As regards the discount through credit notes, there is no dispute that this discount is for damage of the goods during transit after ex-depot sale. In terms of judgments of the Apex Court in the case of CCE, New Delhi v. Vikram Detergent Ltd. (supra), the deduction of damage discount being in the nature of refund or benefit to the buyer by the way of compensation for damage, breakage or loss suffered by the goods after removal from the factory, is not permissible. In view of this, Commissioner (Appeals) s order permitting the deduction of the damage discount is incorrect is liable to be set aside. 7. As regards, the Commissioner (Appeals) s order permitting deduction of rebate and similar claims , these discounts are post sales discounts offered to some special buyers. Commissioner (Appeals) in the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e paid on the depot price, the assessable value would include transport and insurance charges upto the depot and only the deduction of transit insurance in respect of transportation from the depot to the customer s premises would be inadmissible as it is not the case of the department the sales were on FOR destination basis. 9. As regards the question as to whether deduction of packing and forwarding charges is to be allowed, the packing and forwarding charges are mainly expenses incurred on packing of the goods sold from the depot. The appellant s contention is that the goods manufactured by them - laminated sheets are normally sold without packing and only in some cases where the sales are to the outstation customers, the goods are packed in cartons on the instruction of the customers. The department s contention on the other hand, is that the laminated sheets cannot be sold in the ordinary course of trade without packing and, therefore, the packing charges would be includable in the assessable value. The Apex Court in the case of U.O.I. v. Bombay Tyre International Ltd. (supra) on the question of inclusion of packing charges in the assessable value has held that the packing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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