TMI Blog1995 (1) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assistant Collector to that effect will also stand set aside. In the facts and circumstances of the case, there will be no order as to costs. - 215-16 of 1989 - - - Dated:- 10-1-1995 - B.P. Jeevan Reddy and S.B. Majmudar, JJ. Judgment Per : Majmudar, J. - These two appeals are filed by the assessee, Metal Box India Limited, under Section 35L of the Central Excises and Salt Act, 1944 read with Order XX-A B of the Supreme Court Rules, 1966, challenging the order of the Customs, Excise Gold (Control) Appellate Tribunal, New Delhi, in two appeals filed by the appellant-assessee on the one hand and the Collector of Central Excise, Madras, on the other. The appellant is aggrieved by the aforesaid decision of the Tribunal by which it was held that the Department was entitled to reload the price of the concerned goods manufactured by the assessee and sold to M/s. Ponds (I) Limited by ignoring the deduction claimed by the assessee by way of trade discount and also by adding the interest accruing on advances made by the said buyer, Ponds (I) Limited to the assessee during the relevant years of assessment. A few relevant facts may be stated at the outset. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional consideration by way of interest accruing on the advances made by Ponds (I) Limited should not be added to arrive at the assessable value for the period of July 1, 1983 onwards? Why the gross prices should not be arrived at after adding(2) the interest accruing on the advances and the assessable value arrived at on this basis for the period from July 1, 1983? Why the consequential duty should not be demanded from the(3) appellant under the proviso to sub-rule (1) of Rule 10 of the Central Excise Rules, 1944, and under the proviso to Section 11A of the Central Excises Salt Act. 4.The appellant replied to said show cause notice. Another notice was issued on 18th January, 1985 in the nature of a demand-cum-show cause notice whereby the appellant was called upon to show cause as to why the basic excise duty in the sum of Rs. 23,50,013.40 paise and special excise duty in the sum of Rs. 1,17,500.68 paise for the period July 1, 1980 to November 30, 1984 should not be demanded from the appellant. The appellant replied to the said notice on January 18, 1985. 5.After hearing the appellant, the Assistant Collector, Central Excise, Madras, by his decision dated 27th May, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The Tribunal equally erred in law in rejecting the(3) appellant's contention regarding rebates and discounts given to Ponds (I) Limited for being deducted from the gross price. We shall deal with these contentions seriatim. 9.So far as contention No. 1 is concerned, it is obvious that the Department invoked proviso to Section 11A on the ground that while submitting the price list, the appellant had suppressed material facts. It has been found on record that in the price lists submitted by the appellant details of advances made by Ponds (I) Limited, the wholesale buyer of appellant's goods and that too interest free advances of huge amounts were all suppressed from the Department and, therefore, it has to be held that the duty have been short levied on account of wilful suppression of relevant facts by the assessee. This finding is well sustained on record and calls for no interference. We, therefore, concur with the conclusion reached by the Tribunal that longer period of limitation is available to the Department. We reject contention No. 1. 10.So far as contention No. 2 is concerned, it is true that Ponds (I) Limited was almost a wholesale buyer of the appellant's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically provided for in the agreement column 9 as the special agreement between the parties and it had a direct impact on the pegging down of purchase price which ultimately was charged by the appellant from the wholesale buyer, Ponds (I) Limited. The said price charged by the appellant from Ponds (I) Limited could not be said to be normal price of containers on account of extraneous reason, namely, that a favoured treatment was given to Ponds (I) Limited which had given such large amounts to the appellant free of interest for purchasing raw materials and accessories for manufacturing the containers which were ultimately sold by the appellant to Ponds (I) Limited. The Tribunal has also noted the reasoning of the Assistant Collector on this aspect to the effect that the extent of such deduction in the price can reasonably be attributed to the interest amount payable on the advance which had M/s. Metal Box India Limited obtained from any other source with interest bearing loan, would have been loaded on the cost of manufacture and sale price of the metal containers naturally increasing the concessional price charged from Ponds (I) Limited. 11.On the facts on record, therefore, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be lifted by Ponds (I) Limited. For such a buyer if a concession by way of trade discount is given, may be to the extent of 50 per cent though in fact now it will not be to the extent of 50 per cent but much less as we have permitted reloading of the contract price between the parties by the notional value of interest on advances received by the assessee from Ponds (I) Limited during the relevant time, such a trade discount cannot be said to be in any way uncalled for or a special treatment contrary to trade practice. Therefore, once the contention No. 2 is rejected then for deciding contention No. 3 the proviso to Section 4(1)(a) would directly get attracted. Learned counsel for the respondent contended that for attracting the said proviso it should be shown that in accordance with normal practice of wholesale trade different prices are charged from different classes of buyers. That a buyer who purchases 90 per cent of the goods cannot be said to form a different class of buyers. It is difficult to agree with this contention. The buyer who purchases small quantities of goods may stand in different class as compared to a buyer who purchases 90 per cent of manufactured goods. He wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Division Bench of the Gujarat High Court consisting of P.D. Desai and G.T. Nanavati, JJ., interpreting the scope of Section 4 of the Act laid down that Section 4 of the Central Excise Act does not in terms enact the trade discount in order to qualify for deduction thereunder should be on a uniform basis to all wholesale purchasers at the factory gate. Any such view would require the addition of word `uniform' before the `trade discount' occurring in Section 4 which is not evidently permissible. Nor it would be advisable to read the requirement of uniformity even by implication. Even if trade discount is not uniformly given or is given at different rates to different purchasers, it cannot by itself disqualify if from being excluded for arriving at the assessable value so long as the lack of uniformity is not founded on any extra-commercial considerations. To ignore the deduction of trade discount would amount to adding a non-existent fraction to the manufacturing profit which will artificially inflate the net assessable value for the levy of excise duty which is not legally permissible having regard to the basic concept of excise levy. We concur with the aforesaid view on the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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