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2016 (3) TMI 664 - CESTAT MUMBAI

2016 (3) TMI 664 - CESTAT MUMBAI - 2016 (337) E.L.T. 276 (Tri. - Mumbai) - Eligibility of quantity discount - determination of correct sale value - transaction value - deceleration of quantity discount before the sale of the goods from the place of removal i.e. Depot and discount was shown in the sale invoice - Held that:- "Transaction value" as defined in sub-clause (3)(d) of Section 4 has to be read along with the expression "for delivery at the time and place of removal". It is clear, therefo .....

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sis of "transaction value" is therefore the agreed contractual price. Further, the expression "when sold" is not meant to indicate the time at which such goods are sold, but is meant to indicate that goods are the subject matter of an agreement of sale. Once this becomes clear, what the learned counsel for the assessee has argued must necessarily be accepted inasmuch as cash discount is something which is "known" at or prior to the clearance of the goods, being contained in the agreement of sale .....

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RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri. R.B. Pardeshi, Advocate with Shri. N.S. Patel, Advocate For the Respondent : Shri. Ajay Kumar, Joint Commissioner(A.R.) ORDER PER : RAMESH NAIR This appeal is directed against Order-in- Appeal No. AT/216/M-III/2005 dated 12/4/2005 passed by the Commissioner of Central Excise(Appeals) Mumbai Zone-II, wherein Ld. Commissioner (Appeals) rejected the appeal of the appellant by upholding the order-in-original No. KDN/11/SBN/2004 dated 14/9/2004. 2. .....

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antity discount was disallowed. Aggrieved by the Adjudication order, the appellant filed appeal before the Commissioner(Appeals), who rejected the same therefore appellant before us. 3. Shri. R.B. Pardeshi, with Shri. N.S. Patel, Ld. Counsels appearing on behalf of the appellant submits that the goods while clearing from the factory was not for sale it was only a stock transfer and from the depot goods were sold and before selling the goods there was a circular issued for quantity discount and a .....

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relevant at the time of clearance of the goods from the factory to depot. The sale was effected only from the depot and at the time of raising actual sale invoice discount was provided in the invoice itself. 4. On the other hand, Shri. Ajay Kumar, Ld. Joint Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He placed reliance on following judgments: (a) Union of India & Others Vs. M/s. Bombay Tyres International Pvt. Ltd [1984(17)ELT 329(S.C. .....

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ute that the goods were first cleared from the factory not for sale but as a stock transfer to their depot and from depot the actual sale has taken place. The correct sale value and discount if any, can only be determined and reflected in the sale bill and same is irrelevant in case of clearance from factory to depot as said transaction is not the sale transaction therefore even if all the judgments relied upon by the Revenue are applied, it will support the appellants case for the reason that .....

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is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter, but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actual .....

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or at any other time. Hence the excluding the discount value is the correct transaction value and duty cannot be charged on the discount amount which is neither paid nor payable in the case of sale of the goods. In this regard Hon ble Supreme Court in the case of Purolator India Ltd Vs. Commissioner of Central Excise, Delhi-III[2015(323) ELT 227(S.C.)] has observed as under: 18. It can be seen that Section 4 as amended introduces the concept of "transaction value" so that on each remov .....

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