Custom, Excise & Service Tax Tribunal
Cce, Pondicherry vs M/S. Mrf Ltd on 8 September, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH, CHENNAI E/CO/10/04 in E/1126/2003 (Arising out of Order in Appeal No. 485/2003 (P) dated 22.09.2003, passed by the Commissioner of Central Excise (Appeals), Chennai). CCE, Pondicherry : Appellant Vs. M/s. MRF Ltd. : Respondent
Appearance Shri B.B. Agarwal, JCDR, Calcutta for the appellant Shri S. Ignatius, Adv., for the respondent CORAM Dr. CHITTARANJAN SATAPATHY, Technical Member Honble Shri D.N. PANDA, Honble Judicial Member Date of hearing : 08.09.09 Date of decision : 08.09.09 Final ORDER No._____________ Per: Dr. Chittaranjan Satapathy, Heard both sides. In this appeal filed by the department four issues have been raised as submitted by the Ld.JCDR, Shri B.B.Agarwal:-
1. Turnover Discount
2. Prompt Payment Discount
3. Sales Tax/Octroi
4. Application of CAS4 to valuation of intermediate goods for the period prior to 13.02.03.
2. As regards the second issue relating to the Prompt payment discount is concerned, the Ld. Advocate for the respondents Shri S. Ignatious, states that the respondents are not claiming the prompt payment discount and have given up their plea in this regard before the original authority itself. As such, we are not going into this issue as the dispute does not survive.
3. As regards the valuation of the intermediate goods is concerned, now the issue is settled by the Honble Supreme Court, vide CCE, Pune Vs. Cadbury India Ltd. 2006 (200) ELT 353 (S.C.), that CAS4 standard can be applied even for the period prior to 13.02.03.
4. As regards the other two issues relating to deduction on account of turnover discount and deduction on account of sales tax/Octroi etc., the respondents have claimed such discounts and deductions on the basis of computation made by their Chartered Accountant, taking into account the actual discounts given over a period of time in respect of turnover discount and the taxes paid not only over a period of time but also in respect of all the factories of the respondents since the goods have been sold at a uniform price all over India.
5. Shri S. Ignitious, Ld. Advocate, submits that claim for such deduction is supported by the clarificatory order issued by the Honble Supreme Court in the case of UOI & Others Vs. Bombay Tyres International Pvt. Ltd. 1984 (17) ELT 329 (S.C.). He particularly refers to para2 and para4 of the said judgment.
6. Ld. JCDR, Shri B.B. Agarwal, states that the department has objected to claim of 1.06% turnover discount as against the company policy of 1% discount. It has been explained by the Ld. Advocate that the quantum of 1% relates to cum duty value which translates to 1.06% of the basic price and that such calculation is supported by the Chartered Accountant Certificate. We are of the view that since 1.06% represents the actual turnover discount given as certified by the Chartered Accountant, the same is admissible.
6. As regards the deduction towards taxes paid such as additional sales tax and surcharge on sales tax, the Honble Supreme Courts decision in the case of Bombay Tyres International (cited supra) states that when a manufacturer has more than one factory and the goods are sold at the same price, the deduction allowed under the said judgment can be computed and allowed on the basis of such uniform price. Shri S. Ignitious, Ld. Advocate submits that this is what the appellants have done and since the deduction of taxes cannot be computed on each transaction, they have adopted a reasonable basis which has approval of the Honble Supreme Court under the decision cited above.
6. In view of the foregoing facts and circumstances of the case, we are of the view that the deductions claimed by the respondents are reasonable and hence, the impugned order passed by the lower appellate authority in respect of the four issues does not require any interference. Accordingly, we reject the appeal filed by the department.
(Order pronounced and dictated in the open Court) (D.N. PANDA) (Dr. CHITTARANJAN SATAPATHY) JUDICIAL MEMBER TECHNICAL MEMBER BB 4