DHARAMPAL SATYAPAL LTD. Vs. CCE

JUDGEMENT

(1.) THE assessee challenges the order passed by the Commissioner (Appeals) dated 28.6.2002. The issue relates to the question whether the appellant is entitled to deduction in respect of prompt payment discount.

(2.) APPELLANTS are engaged in the manufacture of Pan Masala. They sell the goods to wholesale dealers from their factory. In their price list circulated to the wholesale dealers, they indicated that from the list price a discount of 2% would be admissible to all buyers for prompt payment at the time of delivery of the goods. Excise duty was paid claiming deduction of the discount mentioned above. Show cause notices dated 26.4.96 and 26.12.96 were issued alleging that since all buyers have not availed the benefit of cash discount in respect of the sales, the assessable value would be the price without 2% cash discount. The adjudicating authority allowed the claim of the appellant. On appeal filed by the Revenue, the Commissioner (Appeals) reversed the order. The Commissioner took the view that cash discount which was not passed on by the assessee to the customers who did not avail the facility is liable to duty.

(3.) WE find that decision relied on by the appellant in support of its contention, namely, CCE, Bhopal v. Primo Pick -N -Pack Ltd., 2002 (79) ECC 94 (T) : 2001 (47) RLT 643 covers the issue raised in this appeal. The facts in the above case are similar. The assessee had allowed prompt payment discount at the rate of 3% of the contracted price to all the buyers where payment was made within six days of issue of the invoice by draft at Jabalpur. Some of the customers did not make the payment within the stipulated time. The departmental authorities took the view that irrespective of the question whether the discount had been passed on to the buyers or not it is an allowable deduction if the discount is given to all the buyers and it was known to the trade. The above order was challenged by the Revenue. In the above decision after referring to the decision of the Supreme Court in Anant Raj Industries Ltd. v. CCE, New Delhi, 2001 (76) ECC 665 (SC) : 2001 (44) RLT 818 (SC) it was held that if cash discount has been offered by the assessee to all customers it was irrelevant whether each customer had availed of the discount or not for the assessee to claim deduction. Following the above ratio, the contention raised by the appellant is only to be accepted. We therefore set aside the order impugned and allow the appeal.