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TMI Blog2018 (7) TMI 1949X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 11AC and a further penalty of Rs. 2 crore under rule 25. The demand has been confirmed for the period from November 2003 to March 2008. 2. The issue relates to the valuation of chassis of commercial vehicles cleared by the appellant to body builders. The Commissioner by the impugned order has confirmed the demand on the ground that the deduction of the discount from the Ex-Factory Dealer Net Price is not admissible for arriving at the value of the chassis cleared to the body builder. The Commissioner has further held that since the discount is not passed on to the body builders, the valuation of the goods cannot be on the basis of comparable price. 3. The Ld. Counsel for the appellant submits that in the present case, apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction in the price charged to the independent buyers. It was therefore, the submission of the appellant, that the demand is legally untenable and was liable to be set aside. It was further submitted that the valuation under Section 4(1)(b) read with rule 7 of Rule 8 cannot be adopted in the instant case. The Ld. Counsel further submits that the contention of the department that since the discount was not passed on to the body builder, the deduction of the same will not be allowed, cannot be accepted in view of the judgment in the case of Havells India Limited Vs. Commissioner of Central Excise, LTU, Delhi 2017 (357) ELT 407 (Tri.-Del.) wherein it has been held that any discounts which are part of the agreement of sale will need to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price of the chassis to independent buyers (net of discount) was available and satisfied all the requirements of Section 4(1)(a) of the Central Excise Act, 1944, the same price can be adopted for valuing the chassis cleared to the body builders. The Larger bench of this Tribunal in the case of Ispat Industries Vs. Commissioner of Central Excise 2007 (209) ELT 185 (Tri.-LB) has held that when sale price to independent customer is available, the same price can be adopted for valuation of the goods stock transferred. 8. We also note that the Hon'ble Supreme Court in the following decisions has held that once comparable price of the similar goods to unrelated buyer is available the same can be adopted for valuation of the goods cleared for ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. The learned Commissioner in the impugned order has interpreted these provisions to mean that the appellants were required to pay duty on the goods cleared from their factory to their depot on normal transaction value referred above. Since at the time of initial clearance of goods from their depot, the appellants had not given any discount to their buyers, the deduction on account of various discounts is not applicable. The stand taken by the 1st appellate authority is clearly erroneous. The benefit of deduction of all types of discounts from the value will be available as long as the price and the discounts are known before clearance of goods from the factory. In the present case there is no dispute that the fact that various types of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand proposed in the notice and confirmed by the impugned order is on totally different grounds i. e. by taking into account the amounts of discounts and demanding duty thereon. The provision of Rule 7 or 8 of the Central Excise Valuation Rules does not empower the department to determine duty liability in this manner. Thus, the entire case made out by the department, in our view, is totally erroneous and does not have the support of any provisions of law. 13. In view of the foregoing findings and the decisions relied on by the appellant, we find merit in the appeal filed by the appellant. The impugned order is therefore set aside and the appeal filed by the appellant is allowed with consequential relief, if any. Since we are allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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