Trade discount etc
This is allowed as deduction. board circular cited on page 1.41
‘valuation. Court decisions also cited
on same page. Other discounts like cash
discount also admissible.
Discount is subject to general rules viz. this should be in
ordinary course of business, parties not related etc. Thus if discount is more
than that generally allowed in trade in ordinary course, the unreasonable
amount will be disallowed.
All discounts paid to buyer are allowed. Commission or
discount given to commission agents etc. not allowed.
2011 (272) E.L.T. 385 (Tri. - Mumbai)
GLENMARK PHARMACEUTICALS LTD.
Versus
COMMISSIONER OF C. EX., NASIK
Valuation (Central Excise) - Trade
discount - Quantity discount given in the form of free quantities - Duty
paid on full quantities without taking into account the quantity discount
claimed by way of refund - Refund claimed rejected as quantity discount not
mentioned in the invoice - Issue of invoices at the time of clearances not
necessary when quantity discount given at the time of sales from depot - Turnover
discount permissible even if quantities are quantified on half-yearly basis -
Duty on free quantities paid as per depot invoices - Rejection of refund claim
set aside and case remanded for de novo application in accordance with Supreme
Court decision in Madras Rubber Factory [1995 (77 E.L.T. 433 (S.C.)]. [para 7]
2011 (269) E.L.T. 394 (Tri. - Mumbai)
COMMISSIONER OF C. EX., RAIGAD
Versus
RAPTAKOS BRETT & CO. LTD.
Valuation (Central Excise) - Free replacement of breakage -
Period involved prior to 12-9-2000 - Department’s case that decision of Apex
Court in Surya Roshni Ltd. [2000 (122) E.L.T. 3 (S.C.)] not
allowing such deduction is retrospective - Supreme Court decision not relevant
as there was no precedent decision in appellant’s own case there - Presently
Tribunal decision available in assessee’s own case holding that such deduction
permissible - Decision accepted by Department - Deduction available till
decision of Apex Court in Surya Roshni Ltd. - Revenue’s appeal rejected -
Section 4 of Central Excise Act, 1944. [para
6]
2011 (263) E.L.T. 477 (Tri. - Del.)
COMMISSIONER OF C. EX., CHANDIGARH
Versus
GOETZE (INDIA) LTD.
Valuation (Central Excise) - Turnover discount - Depot sales -
Duty paid at time of clearance from factory at price prevalent at depot
claiming deduction towards turnover discount at average rates - Exact discount
finalised at year end - Deduction assailed as discount not given at time of
sale but determined at later date - Supreme Court in Madras Rubber Factory
[1995 (77) E.L.T. 433
(S.C.)] for provisions as they stood before 1-7-2000, held that discounts known
at time of removal permissible even if quantified later - Present Section 4 of
Central Excise Act, 1944 though not having specific provision for trade discount deduction, concept of transaction value
by very nature would include such deduction - No contention that deduction
not permissible at all - No legal provision that for permitting trade discount, same has to be passed to buyers at time
of sale - Deduction however permissible to the extent actually passed, which
not discussed earlier - Matter remanded - Section 4 ibid. [para 3.1]
