Custom, Excise & Service Tax Tribunal
Cce, Puducherry vs M/S. The Supreme Industries Ltd on 12 February, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/161 & 170/2004
(Arising out of Order-in-Appeal No. 524 & 525/2003 (Pondicherry) dated 21.10.2003 and passed by the Commissioner of Central Excise (Appeals), Chennai)
CCE, Puducherry Appellant
Vs.
M/s. The Supreme Industries Ltd. Respondent
Appearance Shri B. Balamurugan, AC (AR) for the Appellant Shri M.H. Patil, Advocate for the Respondent CORAM Honble Shri D.N. Panda, Judicial Member Honble Shri R. Periasami, Technical Member Date of Hearing / Decision: 12.02.2015 Final Order No. 40167-40168 / 2015 Per D.N. Panda E/161/2004 In this appeal, Revenue has come in appeal challenging the order (at page 9 of the appeal folder) passed by learned Commissioner (Appeals) on 21.10.2003 giving effect to the Final Order No. 1180/2000 dated 21.8.2000 passed in Appeal No. E/727/2000 (Ref. page 17 of the compilation filed). In that order, Tribunal directed learned Commissioner (Appeals) to give finding on the trade discount allowed by assessee to different parties at different rates disputed by Revenue in adjudication.
2. While giving effect to the above order dated 21.8.2000 of Tribunal by learned Commissioner (Appeals), reliance was placed by him on the order dated 26.4.1999 of Commissioner of Trichy who held that trade discount of the above nature is permissible. But being aggrieved by such decision, Revenue came in appeal before Tribunal in Appeal No. E/882/2000. Such appeal of Revenue was decided by Tribunal against it as is reported in 2008 (222) ELT 520 (Tri. Chennai). Tribunal held that the pattern of discount being allowed was declared in the price list filed by respondents therein (assessee) with the department periodically for which the adjudication was held to be barred by limitation. To reach to such conclusion, Tribunal recorded its reasoning in para 2 of the reported order as under:-
2. Grounds stated in the appeal as regards the first issue are that the distributor not being buyer of the goods was a commission agent and the discount received by the distributor was a commission and not discount eligible for abatement from the list price. We find that the Commissioner has passed this part of the order following several judicial authorities as mentioned below :-
(i) Electrical Products Corporation v. Commissioner of Central Excise [1989 (43) E.L.T. 70 (Tri.)].
(ii) Commissioner of Central Excise v. D.H. Woodhead [1998 (29) R.L.T. 328 (CEGAT)].
(iii) Bombay Chemicals Ltd. v. Commissioner of Central Excise, Bombay-II [1998 (29) R.L.T. 112 (CEGAT].
(iv) Hari Chand Shri Gopal v. Collector of Central Excise, Meerut [1998 (28) R.L.T. 494 (CEGAT)] The ratio of these decisions is that as long as the assessee charged the price less the declared discount, though part of the discount was paid to the distributor to whom the assessee had assigned the territory for distribution of assessees goods where the buyer was located, the entire discount was eligible for abatement. The Commissioner found that facts of the case in Electrical Products Corporation v. Commissioner of Central Excise (supra) were that the appellants had sold part of their goods to the wholesale dealers allowing discount as mentioned in the price list and part of the goods to sub-dealers on the advice of the wholesale dealers at a lower discount. The Tribunal had observed that the plea that the wholesale dealers were functioning as commission agents was not tenable. The net realisation by the appellants in all cases were as per price list filed and approved. Hence the appellants were eligible for full discount. In the case of Hari Chand Shri Gopal case (supra), the Tribunal found that the trade discount of 20% was given to sub-dealer and 2.5% of the discount taken back and paid to main dealer in whose jurisdiction the sub-dealer was located. The Tribunal held that 20% was admissible for deduction as main dealers were not selling agents. The Commissioner found that in the instant case, the distributors were not commission agents and, therefore, the assessee had abated the discount correctly for the purpose of payment of duty. [Emphasis supplied]
3. Record also reveals that while deciding the issue above, the Trichy Commissioner relied on the order of learned Commissioner (Appeals) passed on 11.1.1999 in appeal 50/1999. In that appeal, the Commissioner (Appeals) in para 3 of his order relied on his decision made in appeal 193/98-TRY (no date stated).
4. The order passed in appeal No. 50/99 on dated 11.1.99 dealing with trade discount in favour of assessee was not appealed by Revenue. That reached to finality.
5. Even though the issue of trade discount matter has traveled in past through different phases as above, ultimately that issue was by Tribunal in the decision reported in 2008 (222) ELT 520 (Tri. Chennai) relating to the present respondent. That was an appeal came before Tribunal at the instance of Revenue, against order No. 524/2003 dated 21.10.2003 passed by learned Commissioner (Appeals).
6. In view of aforesaid factual matrix, it is not necessary to dilate the issue further except ordering that Revenue appeal is dismissed in view of reaching of trade discount issue to finality by Tribunal. We order accordingly.
E/170/2004
7. So far as this appeal of Revenue is concerned, Revenues challenge is only against trade discount. In view of decision of Tribunal reported in 2008 (222) ELT 520 (Tri. Chennai) in para 2 and 3 thereof, following judicial discipline, it is not possible to entertain appeal of Revenue for which that is dismissed. For convenience of reading, para 2 and 3 of the above reported decision is reproduced below:-
2. Grounds stated in the appeal as regards the first issue are that the distributor not being buyer of the goods was a commission agent and the discount received by the distributor was a commission and not discount eligible for abatement from the list price. We find that the Commissioner has passed this part of the order following several judicial authorities as mentioned below :-
(i) Electrical Products Corporation v. Commissioner of Central Excise [1989 (43) E.L.T. 70 (Tri.)].
(ii) Commissioner of Central Excise v. D.H. Woodhead [1998 (29) R.L.T. 328 (CEGAT)].
(iii) Bombay Chemicals Ltd. v. Commissioner of Central Excise, Bombay-II [1998 (29) R.L.T. 112 (CEGAT].
(iv) Hari Chand Shri Gopal v. Collector of Central Excise, Meerut [1998 (28) R.L.T. 494 (CEGAT)] The ratio of these decisions is that as long as the assessee charged the price less the declared discount, though part of the discount was paid to the distributor to whom the assessee had assigned the territory for distribution of assessees goods where the buyer was located, the entire discount was eligible for abatement. The Commissioner found that facts of the case in Electrical Products Corporation v. Commissioner of Central Excise (supra) were that the appellants had sold part of their goods to the wholesale dealers allowing discount as mentioned in the price list and part of the goods to sub-dealers on the advice of the wholesale dealers at a lower discount. The Tribunal had observed that the plea that the wholesale dealers were functioning as commission agents was not tenable. The net realisation by the appellants in all cases were as per price list filed and approved. Hence the appellants were eligible for full discount. In the case of Hari Chand Shri Gopal case (supra), the Tribunal found that the trade discount of 20% was given to sub-dealer and 2.5% of the discount taken back and paid to main dealer in whose jurisdiction the sub-dealer was located. The Tribunal held that 20% was admissible for deduction as main dealers were not selling agents. The Commissioner found that in the instant case, the distributors were not commission agents and, therefore, the assessee had abated the discount correctly for the purpose of payment of duty.
2.1 We also find that the above pattern of discount being allowed was declared in the price lists filed by the respondents with the department periodically and the show-cause notice issued on 15-6-1995 for demanding short levy relating to clearances made prior to Apr.94 is hit by limitation. Therefore, we find that the challenge to this part of the impugned order is not sustainable.
3. As regards the other part of the? impugned order under challenge related to non-inclusion of proportionate cost of moulds supplied free of cost by the buyers. Commissioner had accepted the Chartered Accountants certificate to the effect that the impugned element had been included in the assessable value. The appeal urges that Commissioner should not have gone by the certificate and should have examined as to whether the billing price included the amortized cost of the moulds. Moreover, the Chartered Accountants certificate relied upon did not cover clearances to M/s. Orient Vision Ltd. and M/s. Videocon Appliances Ltd. [Emphasis supplied]
8. For the cryptic order passed by learned Commissioner (Appeals) in the present case and innumerable difficulties we faced to trace different past orders with the issues involved therein, before parting with this order, we may state that an order of an appellate authority to meet judicial scrutiny should be in clear terms, stating what is the matter in controversy before him, the points for his decision, the facts in issue, evidence tested, law applicable and reasons for the decision as well as his decision thereon. This is mandate of section 35(4) of the Central Excise Act, 1944 and similar provision enacted in Customs Act, 1962. Any deviation to such process, makes an order cryptic, unreasoned and non-speaking.
9. We may add that Honble Supreme Court has guided quasi judicial and judicial authorities from time to time as to the manner how thy should pass order in a proceeding. That is stated in para 7 of the Judgment in Joint Commissioner of Income Tax, Surat Vs. Saheli Leasing & Industries Ltd. 2010 (253) ELT 705 (SC). The said para is reproduced for guidance of such authorities.
7. These? guidelines are only illustrative in nature, not exhaustive and can further be elaborated looking to the need and requirement of a given case :-
(a) It should always be kept in mind that nothing should be written in the judgment/order, which may not be germane to the facts of the case; It should have a co-relation with the applicable law and facts. The ratio decidendi should be clearly spelt out from the judgment/order.
(b) After preparing the draft, it is necessary to go through the same to find out, if anything, essential to be mentioned, has escaped discussion.
(c) The ultimate finished judgment/order should have sustained chronology, regard being had to the concept that it has readable, continued interest and one does not feel like parting or leaving it in the midway. To elaborate, it should have flow and perfect sequence of events, which would continue to generate interest in the reader.
(d) Appropriate care should be taken not to load it with all legal knowledge on the subject as citation of too many judgments creates more confusion rather than clarity. The foremost requirement is that leading judgments should be mentioned and the evolution that has taken place ever since the same were pronounced and thereafter, latest judgment, in which all previous judgments have been considered, should be mentioned. While writing judgment, psychology of the reader has also to be borne in mind, for the perception on that score is imperative.
(e) Language should not be rhetoric and should not reflect a contrived effort on the part of the author.
(f) After arguments are concluded, an endeavour should be made to pronounce the judgment at the earliest and in any case not beyond a period of three months. Keeping it pending for long time, sends a wrong signal to the litigants and the society.
(g) It should be avoided to give instances, which are likely to cause public agitation or to a particular society. Nothing should be reflected in the same which may hurt the feelings or emotions of any individual or society. [Emphasis supplied]
10. We hope in future, order of appellate authority shall emanate in the manner Honble Supreme Court has directed above.
(Dictated and pronounced in open court) (R. PERIASAMI) (D.N. Panda) Technical Member Judicial Member Rex 2 7