TMI Blog1993 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... n Rs. 1,181 lacs, Rs. 1,570 lacs and Rs. 1,970.46 lacs, respectively. On the aforesaid total gross turnover, the petitioners have paid excise duties amounting to Rs. 1,19,83,958/-, Rs. 1,49,44,630/- and Rs. 1,48,15,278/- annually for the aforestated period. The above products manufactured by the petitioners are chargeable to excise duty on ad valorem basis and no tariff value has been fixed by the Central Government in respect thereof. (b) By two Price Lists dated 20th March, 1980, the petitioners claimed deduction of 28% of the turnover as post-manufacturing expenses. (c) By show cause notice dated 20th May, 1980, issued by the Assistant Collector it was alleged that no post-manufacturing expenses could be allowed when normal wholesale cash price is available. In reply to the said show cause notice, the petitioners repeated their claim for deduction vide letter dated 27th May, 1980. By Order dated 9th July, 1980, the Assistant Collector rejected the claim for deduction. (d) On 5th May, 1983, the Supreme Court delivered its judgment in the case of Bombay Tyres International Ltd. v. Union of India [1979 (4) E.L.T. (J 625)] in the matter of post-manufacturing expenses. (e) Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Quantity discount, it was claimed that the said discount was allowed by the Petitioners at the end of the year. In this connection Mr. Berarwalla, on behalf of the petitioners, placed reliance on the letters dated 2nd February, 1984, 8th March, 1984 and 13th March, 1984, and submitted that if one goes through the said correspondence, it was clear that all the relevant documents and particulars were furnished to the Assistant Collector and the Assistant Collector erred in coming to the conclusion that no particulars have been given in the matter of Quantity discount. We are afraid that we cannot accept the said contention of Mr. Berarwalla. In this connection it may be noted that by letter dated 26th February, 1984, addressed by the Assistant Collector to the Petitioners, the Assistant Collector has sought details and clarification with regard to Quantity discount. By the said letter, the Assistant Collector specifically sought clarification whether the trade discounts were uniformaly given or otherwise known at the time of removal of the goods from the factory and whether they are supported by contracts or agreements. We find that despite opportunity being given to the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25% to 1.52% as against the claim of 5% for down payment. The Assistant Collector came to the conclusion that on close scrutiny of the invoices submitted by the petitioners, very few cases of cash down payments have been proved and, therefore, the Petitioners were not entitled to claim Cash discount at 5%. In this connection, we find that the Petitioners submitted approximately 800 invoices wherein cash discount of 5% was passed on for down payment. The Petitioners have also relied upon credit notes in support of their submissions. In view of the Petitioners furnishing 800 invoices, it is clear that the Assistant Collector erred in coming to the conclusion that very few cases of cash discount at 5% were shown and, therefore, the Petitioners were not entitled to rebate calculated at the rate of 5%. We find considerable merit in the contention of Mr. Berarwalla on behalf of the petitioners that the assessee was entitled to claim cash discount at the rate of 5% for down payment. The view taken by us is supported by the judgment of this Court in the case of Jenson Nicholson v. Union of India, reported in [1984 (17) E.L.T. 4]. In the said judgment, it has been laid down that Cash disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zation at a place or places outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the Heads (which include interest on inventories, stocks carried by the manufacturers after clearance as also marketing and selling organization expenses) cannot be claimed as an item of deduction. In view of the clear ratio of the Supreme Court in the case of Bombay Tyres (supra) (vide paragraph 50 of the said judgment), the Assistant Collector was right in coming to the conclusion that the Petitioners were not entitled to claim deduction under the above two Heads. In the circumstances, the Petitioners are not entitled to claim the said deductions as rightly held by the Assistant Collector. The only relief, therefore, which the Petitioners are entitled to is in the matter of Cash discount. The Assistant Collector is directed to calculate the rebate in the matter of Cash discount at the rate of 5%. It is also made clear that the Assistant Collector will pass refund orders in respect of Cash discount calculated at the rate of 5% within a period of 12 weeks from today in accordance with law. The Assistant Collector is also at liberty to call upon the Petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X
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