TMI Blog2007 (2) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The brief facts of the case are that M/s. Crompton Greaves are engaged in manufacture of electrical fans and were filing price list from time to time claiming trade discount on different varieties of fans cleared by them. It appeared that the assessee prepared invoices and claimed discount at the time of clearance which were not fully passed on to the wholesale dealers by their depots. The assessee was therefore asked to produce copies of invoices issued from depots to ascertain difference between discounts claimed and the one actually passed on for the period 1991 to 1995 for verification. Due to voluminous nature of the number invoices, the assessee expressed practical difficulties in producing all the invoices and after protracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not passed on due to voluminous and huge number of invoices involved, it was agreed by the assessee that the duty can be demanded on a pro rata basis and they vide then letter dated 13-11-2000 submitted that amount of excise duty payable could be worked out by multiplying the said amount to arrive at annual basis and then calculating the appropriate excise duty payable at the rates prevailing during the period in dispute. The Commissioner thereafter worked out the demand as per the understanding reached with the assessee. However while working out the demand, the Commissioner adopted the following formula :- "Total amount of trade discount not passed on, fully or partially, Rs. 15,878/- divided by the total number of fans (where trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which discount was either not passed on or partially passed on. If the formula is worked out in the manner suggested by them then the amount of trade discount not passed on per fan will come to Rs. 0.31 as against Rs. 5.76 per fan worked out by the Commissioner. The learned Advocate also submitted a copy of the certificate given by the Chartered Accountants which specifies the quantity of fans cleared during the audit period by the 8 branches as 51367 Nos. and the amount of trade discount not passed on as Rs. 15,878/-. The pro rata discount not passed on comes to Rs. 0.31. It was submitted that if the differential duty is worked out in the manner suggested by them the amount will come down Rs. 4,26,640.92 as against Rs. 69,28,042/- confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the total amount of discount not passed on, has been determined to be Rs. 15,878/- in respect of the entire clearances made by the 8 depots in the month of April for which the scrutiny was taken up, this amount should have been divided by the total number of fans cleared during that period to determine the discount not passed on per fan and not by the number of fans in respect of which the discount was not passed on. The ratio in that case would be Rs. 0.31 as per Chartered Accountant's certificate instead of Rs. 5.76/- worked out by the Commissioner. However, the total number of fans cleared by the 8 depots as reflected in the Chartered Accountant's certificate needs verification by the Commissioner especially when we find that the Chart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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