Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of C. Ex. vs H And R Johnson (India) Ltd. on 5 May, 1999
Equivalent citations: 1999(112)ELT65(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. In this appeal filed by Revenue the Order-in-Original No. 10/97, dated 3-4-1997 passed by Commissioner of Central Excise is impugned on the ground that the Commissioner has erroneously allowed deduction of cash discount (prompt payment discount) from the assessable value of the goods cleared by the present respondents, even in cases where the payment was not done promptly, i.e. within the stipulated date as per the offer available on the body of the invoices.
2. Heard Ms. Aruna Gupta, ld. JDR who submits that the Hon'ble High Court at Bombay in the case of Hindustan Mineral Production Co. (P) Ltd. v. U.O.I. as reported in 1994 (72) E.L.T. 23 (Bom.) has clearly held that such cash discount can be deducted from the assessable value only in respect of transactions in which they are actually availed of by the customers and not across the board. Ld. DR submits that in this case, the respondents have availed such across the board deductions from the assessable value, therefore the order impugned errs by supporting this decision.
3. Heard Shri M.S. Srinivasa, ld. Advocate for respondents who submits that the issue is clearly covered by a series of decisions as follows :-
(a) Jenson & Nicholson (I) Ltd. v. U.O.I. -1984 (17) E.L.T. 4 (Bom.)
(b) Goodlass Nerolac Paints Ltd. v. U.O.I. -1993 (65) E.L.T. 186 (Bom.)
(c) U.O.I. v. SSM Bros. Pvt. Ltd. -1986 (24) E.L.T. 269 (Mad.)
(d) C.C.E. v. Stallion Shox Ltd. -1996 (85) E.L.T. 139.
(e) C.C.E. (Coimbatore) v. American Auto Services -1988 (101) E.L.T. 187
(f) C.C.E. (Cochin) v. Kerala Oil & Soaps Ltd. 1998 (97) E.L.T. 264.
4. Ld. Advocate also cites the case of Bharatia Cutler Hammer Ltd. v. C.C.E. as reported in 1988 (34) E.L.T. 373 (Tribunal) wherein the Hon'ble Tribunal has held that Cash discount for prompt payment of price is deductible from the assessable value irrespective of whether each customer availed it or not. Ld. Advocate submits that an appeal against this order of the Tribunal by the Govt. was admitted by the Hon'ble Supreme Court on 10-2-1995 as Civil Appeal No. 920/89 1995 (78) E.L.T A217, This appeal was considered by the Hon'ble Apex Court vide their order dated 15th July, 1997 wherein the Hon'ble Supreme Court held as follows :-
"In view of the decisions of this Court in Union of India and Ors. v. Bombay Tyres International Pvt. Ltd., 1984 (17) E.L.T. 329 (S.C.) and Govt. of India v. Madras Rubber Factory Ltd. 1995 (77) E.L.T. 433 (S.C.) (at page 489 - paras 61 and 62), this appeal has to be dismissed. Consequently, the appeal is dismissed."
Ld. Advocate therefore submits that Tribunal's decision in Bharatia Cutler Hammer Ltd. supra has attained finality, after due consideration by Hon'ble Supreme Court and would therefore, supercede the decision of Hon'ble Bombay High Court cited by ld. DR supra.
5. Ld. Advocate also submits that the Hon'ble High Court at Bombay in their decision in the case of Goodlass Nerolac Paints Ltd. as reported in 1993 (65) E.L.T. 186 (Bom.) (para 10) has also held that the Cash discount of 5% was available for deduction irrespective of whether each customer avails of the said discount or not. The Govt.'s Special Leave Petition filed before the Hon'ble Supreme Court against this decision of the Bombay High Court was dismissed on merits as in 1994 (73) E.L.T. A58. Therefore, ld. Advocate submits that the issue is covered in their favour by plethora of decisions which have been tested twice at the level of the Hon'ble Supreme Court and the law today is in their favour.
5. We have carefully considered the rival submissions and records of the case. We find that the matter is no longer res Integra in view of the decisions in the case of Bharatia Cutler Hammer Ltd. supra as well as the Goodlass Nerolac Paints supra having been considered by the Hon'ble Apex Court and the decision emerging in favour of the present respondents to the effect that the Cash discount for prompt payment as evidenced from Invoices making it available and known to all buyers, is deductible from the assessable value across the board and not restricted to only those transactions where the individual buyers have availed of the said discount. We find that while the ld. Commissioner in the Order-in-Original impugned, has considered in detail decisions on this issue, the Revenue in their grounds of appeal has not met or distinguished any of these decisions. Therefore, respectfully applying the ratio of the aforesaid two decisions, we are of the opinion that there is no infirmity in the Order-in-original impugned which compels us to interfere with the same. The appeal of Revenue is therefore dismissed.