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Bajaj Electricals Ltd. Versus Commissioner of Central Excise, Pune-III

2015 (10) TMI 2202 - CESTAT MUMBAI

Determination of assessable value - Trade discount - Held that:- Service charges do not appear to be a trade discount for the simple reason that in the same invoice there is a discount with the name trade discount. The learned counsel for the appellant, in spite of 2-3 adjournments, has not been able to bring out any evidence whatsoever to support his contention that deduction due to service charges are nothing but trade discount. In the absence of any documentary evidence, we are unable to acce .....

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to 3740/05-Mum - Final Order Nos. A/2000-2002/2015-WZB(EB) - Dated:- 2-7-2015 - Hon ble Mr. P.K. Jain, Member (Technical) And Hon ble Mr. S.S. Garg, Member (Judicial),JJ. For the Appellant : Shri T.C. Nair, Advocate For the Respondent : Shri Sanjay Hasija, Superintendent (AR) ORDER Per: P.K. Jain Brief facts of the case are that the appellants are manufacturing various types of fans and were selling to their wholesaler/dealer. For selling the same, they used to give trade discount per fan. In a .....

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tment as well as to the dealers and, therefore, the amount is required to be deducted. It is also the submission that due to the objection from the department, w.e.f. 1st September 1999 they changed the nomenclature from service charges to additional trade discount and hence at least after the said date, they should be given the benefit of the said discount. 2. The learned counsel for the appellant reiterated the above mentioned submissions and submitted that there are catena of judgments of var .....

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434 (T); (iv) Torque Pharmaceuticals reported in 2009 (248) ELT 604 (T). 3. The learned AR, on the other hand, submitted that for admissibility of the discount, first of all the appellant has to prove that it is a trade discount. If there is a deduction for some other reason, then that cannot be called as a trade discount. For example, if an amount is deducted for providing post clearance services to goods either in the dealer s premises or in the customer s premises, the same cannot be called a .....

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ervices charges is not a trade discount, hence includable in the assessable value. 4. We have considered the rival submissions. We note that the three-Member Bench of this Tribunal in the case of Premier Automobiles Ltd. has observed as under:- 4.As stated earlier, the learned counsel for the appellants has drawn our attention to the clarification given by the Supreme Court while construing the expression trade discount . It is true that the Court has held that discount allowed in the trade shou .....

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being known at or prior to the removal of the goods. (emphasis supplied) Thus, the Supreme Court has laid lot of stress on the fact that trade discount to be treated as such must stand the test of established practice of the Trade and commerce. We find ourselves unable to accept the contention of the learned counsel for the appellants that after-sales service charges could be treated as a discount, in the light of the guidelines set out by the Supreme Court. For all these reasons, we are unable .....

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o mention on the invoices what service charge " means. Therefore, the customer does not know that' Service Charge " is a discount. It is necessary that customer should know from the invoice that discount is clearly shown on the invoice and the same is passed on to the customer then only deduction on account of discount is permissible under the law . A detailed nature of transaction with their customers and the place this "service charge" occupies in that transaction shoul .....

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