TMI Blog1993 (6) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... the wholesale price to arrive at the assessable value. The claim for deduction was based on the basis of cost data for the year 1978-79. The company thereafter filed several price lists and the Assistant Collector passed order on July 10, 1981 holding that the deductions claimed on account of post-manufacturing expenses were not permissible. The company had also filed several applications for refund, claiming refund of duty in respect of radios and calculators. The Assistant Collector dismissed all the applications for refund by passing diverse orders. 2. The company preferred appeals before the Collector (Appeals), Bombay. During the pendency of the appeals, the company filed writ petition No. 2004 of 1982 in this Court and the learned Single Judge made the petition absolute and directed the department to determine the deduction on account of post-manufacturing expenses within a period of four weeks and refund the amount collected in excess within a period of two weeks thereafter. The Assistant Collector, in accordance with the direction of the High Court, took up the proceedings and after hearing the claim of the company, rejected the contention that the deductions are necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discount was not known at the time of removal of the goods. The Assistant Collector observed that though the nature of the discount is known, the allowance is not known till the dealer fulfils the conditions required for claiming the bonus and the fulfilment of conditions can be ascertained only at the end of the year or specified period of the bonus scheme. The finding of the Assistant Collector that the petitioners are not entitled to claim deduction on this count is not correct. The Supreme Court in decision reported in 1984 (17) E.L.T. 329 (S.C.) examined the claim as regards the trade discount and observed that discounts allowed in the trade (by whatever name such discount is described) should be allowed to be deducted from the sale price having regard to the nature of the goods, if established under agreements or under terms of sale or by established practice, the allowance and the nature of the discount being known at or prior to the removal of the goods. The question which falls for determination therefore is whether the bonus to dealers falls within the expression "discounts allowed in the trade". As observed by, the Supreme Court, the trade discount should be allowed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the company it appears that the company assigned specific sales target to the dealer at the beginning of the year and these targets include sales of both the manufactured sets and traded sets. According to the Assistant Collector, as the bonus scheme is a composite one covering both manufactured and traded sets, it is not permissible for the company to claim deductions on the strength of bonus scheme in respect of manufactured articles. The conclusion of the Assistant Collector is erroneous and unsustainable. Merely because composite scheme is floated by the company, that would not entitle the Assistant Collector to reject the scheme even in respect of manufactured articles. The Assistant Collector will have to examine what amount of bonus was paid in respect of manufactured articles and if that fact is established by the company; then deduction shall be granted. Shri Sethna submitted that the advantage of deduction under the heading "bonus to dealers" is available provided it is established by the company that the payment of bonus to dealers is under an agreement or under terms of sale or the established practice. It is obvious that the burden is upon the company to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, the Assistant Collector has erroneously declined to examine the claim under this heading and therefore the Assistant Collector will have to reconsider the entire claim and pass appropriate order. 5. The third claim for deduction is under the heading of transit insurance. It is not in dispute that the company is entitled to claim deduction in respect of transit insurance charges. The Assistant Collector again declined to grant deduction on the ground that the accounts of the company reveal that there is only one heading 'insurance' which includes the amount towards fire insurance, transit insurance, storage insurance, building insurance etc. The Assistant Collector observed that as the company failed to present the worksheets to establish what exact amount was paid towards transit insurance, the entire claim should be turned down. We are afraid that the Assistant Collector has failed to discharge the duty to determine the claim of the company. It is not permissible to reject the entire claim even assuming that the company has not filed separate worksheets to establish what amount was paid towards transit insurance. It was open for the Assistant Collector to fix any amount un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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