Customs, Excise and Gold Tribunal - Mumbai
Asian Paints (India) Ltd. vs Commissioner Of Customs & Central ... on 18 July, 2003
ORDER Gowri Shankar, Member (T)
1. The common question for consideration in these two appeals is the eligibility to discount from the assessable value of paints and varnishes that the appellant manufactured.
2. We have heard Mr. A. Fernandes, manager of the appellant, and the departmental representative.
3. Among the four discounts under consideration, the representative of the appellant conceded that it did not have any claim for core commission and special deals. We are therefore left with bonus scheme and other dealer discount schemes. Mr. Fernandes explains the bonus scheme to be as follows. The scheme is decided by each of the branch managers of the appellant of whom there were about 50 at the relevant time, and is applicable to dealers located within the jurisdiction of each branch manager. The total quantity of bonus that can be paid from a particular branch is decided by the head office. Subject of these limits of the budget not being exceeded, it is the sole description of the branch manager to decide upon the terms subject to which bonus available and the quantity of the bonus. On being asked, Mr. Fernandes states that he does not have any written material which lays out the parameters prescribed by each manager to qualify for the year end bonus. He also states that no such material has been produced before the adjudicating or the appellate authority.
4. In this situation, we do not find it possible to say that such a discount for deduction. The requirement that the discount that it must be uniform and also that it must be made known to the person is not fulfilled. Even the broad parameters of the discount has not been explained, evidently for the reason that no record has been kept of such discount. The contention that the nature of the scheme is made known to the dealers because it is paid year after year is difficult to accept. Apart from anything else, it assumes that the scheme continued unaltered throughout the years. In the total absence of any evidence, we do not think that a case has been made out.
5. The same conclusion would apply to the "other dealer discount scheme". Mr. Fernandes handed over a copy of a circular dated 15.4.1993 issued to all agents, branches, depots and stock points which is a kind of circular that was issued to regulate such a discount. Paragraph C-I for dealer schemes, according to him, covers the scheme in question. There are no dictated parameters laid down in the circular. All that it says is that the schemes are useful for a period of one month. The monthly strategy and pattern are decided in advance at the planning meets and recorded in the planning document of the branch. It is further stated that the schemes are announced in advance and uniformly applicable to all dealers and branches. Mr. Fernandes explains that such a scheme would be formulated at the discretion of the local branch manager. Taking into account what the position of the sales vis-a-vis that as of a company in the area, it could be for a particular product for a combination of products. He emphasises that it was uniform for all dealers in a branch.
6. If, as is stated the schemes are announced in advance, it is reasonable to explain that a copy of such scheme would be available. This was not available. Mr. Fernandes states that such copy was not given to the adjudicating or the appellate authority. It is therefore not possible to say that the fact of expense of the scheme was in fact made available. In the absence of the details of the scheme, we do not find it possible to conclude that it was allowed as a reduction.
7. The appellant relies upon paragraph 5 & 6 of the judgment of the Bombay High Court in Goodlass Nerolac Paints Ltd. v. UOI 1993 (65) ELT 186. Paragraph 5 of the judgment refers to bonus discount and paragraph 6 to additional product rebate. In the absence of the details of the scheme, it is not possible to say that the conclusion arrived at by the High Court would apply to these discounts.
8. The appeals are accordingly dismissed.