TMI Blog2017 (6) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed as valid deductions under Section 4 of the Central Excise Act, 1944 - in the recent decision of the Tribunal in the case of Biochem Pharmaceutical Industries Vs. CCE, Mumbai-III [2016 (3) TMI 664 - CESTAT MUMBAI], a similar issue was examined and decided in favour of the assessee. It was held in the case that quantity discount was correctly claimed by the appellant as the same was claimed at the time of sale of the goods. Quantum of discount extended - the assessee s claim is that the excise duty paid per unit of bandage is already more than that payable after quantity discount - Held that: - the issue has been remanded to the original authority for re-quantification of demand in the light of Rule 5 of Central Excise Valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice to their central warehousing depot, the assessee also removed additional quantities to the extent of 20 to 30% which were removed as free offer without payment of duty. The assessee s claim is that the goods cleared as free offer are in fact cleared by granting quantity discounts at the time of selling from the central warehousing depot to the dealers. Such quantity discounts were disallowed by the original authority but allowed at the level of the first appellate authority. iii. A portion of goods cleared as free offer to the depots in subsequent sales, these were found to have been sold to certain institutions at reduced prices and without quantity discount. In respect of such sales, the benefit of such reduced price was disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] Consequently, we find no infirmity in the decisions of the Commissioner(Appeals) on this issue, which are upheld. 5. Next, we consider the issue of quantity discounts. The goods have been cleared from the factory on payment of excise duty on stock transfer basis to their depots. At the time of such clearances, the appellant cleared additional quantities and termed these as free offer . Nevertheless, the claim of the appellant is that such discounts are in the nature of quantity discounts only. The reason adopted by the original authority for disallowing such discounts was that these have not been intimated to the Department before granting such discounts. Further these have also not been made known to the buyers in advance. The su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sale or at any other time shall be the transaction value. In the present case admittedly the sale has not taken place from the factory gate but goods were sold from the depot and at the time of sale from the depot the price charged was the price minus quantity discount therefore the price excluding the quantity discount is an amount payable at the time of sale or at any other time. Hence 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. v. Commissioner of Central Excise, Delhi-III [2015 (323) E.L.T. 227 (S.C.)] has observed as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earance of the goods, being contained in the agreement of sale between the assessee and its buyers, and must therefore be deducted from the sale price in order to arrive at the value of excisable goods at the time of removal . In view of our above observation on facts and settle legal position of law, we are of the considered view that quantity discount was correctly claimed by the appellant as the same was claimed at the time of sale of the goods. We therefore set aside the impugned order and allow the appeal of the appellant. By following the above decisions, we find no infirmity in the impugned orders in respect of the allowance of quantity discount. 6. Now, we consider the disallowance of the special price extended by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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