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2016 (10) TMI 650 - CESTAT CHANDIGARH

2016 (10) TMI 650 - CESTAT CHANDIGARH - TMI - Deduction of Trade discount from Assessable value - Eligibility of Trade discount - three type of discounts : (a) declared discounts to the dealers on goods sold to such dealers; (b) declared discounts to the dealers by way of credit note on sales arranged by such dealers; and (c) commission paid to consignment agents on sales made by them to independent buyers - Held that: - these are transactions of sale by the appellants to the appointed dealers a .....

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isions of Section 4 of the Central Excise Act - commission (claimed as ‘trade discount') paid to such agents/dealers for arranged sales to third parties will not be eligible for deduction. - Time limitation - Appellants did not respond for certain queries and certain declarations now produced by the appellants did not bear the stamp of the office - the present notices were issued on scrutiny of records maintained by the appellants which included the declarations and returns filed by the appell .....

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ent/Yarn liable to Central Excise Duty. The goods were sold at the factory gate as well as through sales depots located at different parts of the country. The sales were effected through dealers and consignment agents appointed by them. The dispute in the present case is the eligibility of deduction of 2% or 1% to them as trade discount from the sale price of depot. This deduction was claimed on all excise invoices even though no trade discount was allowed on all commercial invoices. Proceedings .....

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). Another appeal is against the order passed by the Commissioner (Appeals), Jalandhar (HQ at Chandigarh) dated 20.07.2006 on the same issue. 2. The learned counsel for the appellants submitted that the lower authorities did not consider the agreements entered into by the appellants with their dealers and also the declared sales pattern of the appellants in correct factual prospective. All the agreements entered into by the appellants were taken as Agency Agreements' and proceeded to deny th .....

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are acting in twin capacity of "dealers" as well as "an agent". Various clauses of the agreements when examined clearly will show that the dealers are buying excisable goods from the appellants and are re-selling thereafter. They also do arrange sales of goods in their capacity as del-credre agents. Treating all the transactions between the appellants and the dealers as transactions' is factually and legally not tenable; (ii) The del-credre risk has limited applicability .....

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on to the dealers are clearly mentioned in the invoices; and (iv) Without prejudice to any of the points on merit, the appellants contested the demands for extended period. It is their case that in terms of the then Rule 173-C, they have been submitting the required declarations regularly giving the pattern of sale and the agreements entered into also have been furnished. The lower authorities have erred in holding that the appellants suppressed facts regarding nature of transaction with the de .....

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isclosed the full details of the agreement and the lower authorities have recorded detailed findings on the same. He submitted that the appeals are without merit. 4. We have heard both sides and examined the appeal records. We find that this is a second round of litigation in respect of various demands made from May 1997 to December 2004. The second appeal is for the period January 2005 to November 2005. The Tribunal vide final order dated 29.12.2006 remanded the matter to the original authority .....

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of the appellants is that, the dealers have substantially acted in most of the transactions as buyers of goods for further re-sale to retailers and others. In some cases, they also acted as agents for arranging sales to buyers from the appellants. On perusal of the agreement, we find that one of the terms of the condition is that the dealer shall be allowed a trade discount of ₹ 1/- per kg on the quantity of yarn sold to them. Further, it was also stipulated that the dealer will ensure lif .....

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independent buyers for which the dealers were paid percentage as incentive. This apparently is an agency commission' not to be considered as trade discount on sale of excisable goods. It is clear that such commission' cannot be considered for discount in terms of legal provisions of Section 4. We note that the learned counsel during the course of submission categorically stated that they are not contesting the disallowance of deduction towards such commission As such we uphold the findin .....

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997, 12.11.1998, 12.06.2000 and 27.10.2000 indicating the details, as required in the proforma. We note that the listed address of the dealers and the sales policy were also declared to the Department. In the impugned order, it is recorded that the jurisdictional Central Excise authority was asked to verify the records to ascertain the facts. But it was informed that despite best efforts no records of the notice for the relevant period were traceable in the Range Office. In the absence of such v .....

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