Customs, Excise and Gold Tribunal - Mumbai
M/S Biochem Pharmaceuticals Inds. vs Commissioner Of Central Excise And ... on 1 May, 2001
Equivalent citations: 2002(140)ELT407(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The appellant manufactures patent of propriety medicaments in its factory and clears them on payment of duty to its depot for sale to customers. In the price-list filed by it, it claimed in respect of some of its products, discount expressed in the quantity of the goods cleared. Thus, for example, the discount on Otrim Suspension was expressed as "one bottle per every 11 bottles" indicating that for the price for 10 bottles the buyer would get eleven.
2. Notice issued to the appellant in respect of clearances made in November 1993 to March 1994, proposed to disallow such discount and demanded duty calculated by including it. The notice advanced two reasons that the discount was not expressed in terms of value and the appellant had not quantified the discount in the price-list. The second reason was that there was no sale from the depots and therefore the discount was "not passed on to the buyer" at the time of delivery at the factory gate.
3. The Assistant Collector dropped the proceedings. The department appealed the order. The Commissioner (Appeals) found that no figures of quantity discount has been entered at column 8 of the price-list filed by the manufacturer indicating that no discount was claimed. He also said that what was claimed was not discount, which according to him was an abatement from the normal price of the goods. For these reasons, he allowed the department's appeal and set aside the Assistant Collector's order. Hence this appeal by the manufacturer.
4. The case of the appellant for deduction in the manner in which it was claimed that is covered by the judgment of the Bombay High Court in Goodlass Nerolac Paints Ltd. vs. UOI 1993 (65) ELT 186. In paragraph 7 of this judgment, the High Court has accepted that free supply of goods of the kind that the appellant made, is really a quantity discount and hence entitled for deduction. In paragraph 6 of the same judgment, it has held that such deduction is permissible when the goods are sold not from the factory but from the depot. In the appellant's case, the discount was different; there was no varying rates of discount, depending upon the quantity of goods to be purchased for any other condition to be fulfilled. Every buyer who bought the goods would be entitled to discount expressed in terms of quantity. The fact there was no clearance from the factory therefore would not be a bar for claiming of the discount.
5. The departmental representative is not able to cite any other decision that is contrary to the appellant's case. The appeal is accordingly allowed and the impugned order set aside.
(Dictated in Court)