TRIVENI GLASS LIMITED Vs. CCE

JUDGEMENT

(1.) THE appellants are manufacturers of Flat Glass of different varieties, they filed 5 refund claims in respect of clearances made from July to November 2000 on the ground that they has paid excess Central Excise Duty at the time of removal of the goods to their dealers. The impugned orders have rejected these refund applications on the ground the original payment of duty at the time of clearance of the goods from the factory was based on sales price and since those sales prices constituted the correct assessable value, no excess payment of duty has taken place. It was also held that the credit notes issued (subsequent to the sales) to the dealers who purchased the goods were issued without any valid ground since price of the goods was known at the time of removal from the factory.

(2.) IT is the submission of the appellants that, during the relevant period, their practice was to clear the goods from the factory and dispatch them to dealers by showing a uniform price fixed in a meeting of Glass Manufacturers Association from time to time. However, because of stiff competition in the market and slump in the sales of the goods, the appellants were giving discounts. It is contended that such discounts were determined on monthly basis, and credit notes issued to the dealers for the amount due by way of discount in a month, along with the last sale for the month. It is the appellant's contention that sale price for the goods was the net price arrived at by reducing the credit notes amounts from the invoice amounts. They have also pointed out that the accounts between the appellant and their buyers were always settled on a monthly basis, taking into account such net prices. No amount was paid or payable for the goods over and above the net price, i.e. invoice price minus credit note amount.

(3.) DURING the hearing of the case, learned Counsel for the appellant submitted that during the relevant period in terms of Section 4 of the Central Excise Act, 1944 (as amended w.e.f. 1.7.2000) the assessable value is to be the transaction valve. It is his submission in the present case, since the net of credit notes amounts constituted transaction value, the net amount was to be treated as the assessable value and not the amount shown in the invoice at the time of original removal of the goods from the factory to the dealers. He pointed out that the credit notes were being issued on a monthly basis for the total quantity sold to a dealer in a month and as noted in the impugned orders themselves, credit note for the month to a dealer was issued on the same day as the last invoice for that particular dealer. According to the learned Counsel, this showed that the actual price for the transaction was the discounted price. Learned Counsel also pointed out that it is settled law that assessable value should be worked out after allowing the discounts extended by the manufacturer to the dealers. In this context, he referred to the decision of this Tribunal in the case of CCE, Meerut v. Pashupati Acrylon Ltd., 2000 (120) ELT 768 (T). Learned Counsel also emphasized that lower authorities were in error in holding that prices indicated in the invoices prepared at the time of removal of the goods constituted the transaction values and subsequent issue of credit notes only showed a revision of those values. According to learned Counsel, the very fact that, from month to month, the appellants were issuing credit notes showed that prices had not been fixed at the time of removal of the goods and that the prices indicated in the invoices were provisional and was to be settled during the course of month and that the provisional nature of the prices indicated in the invoices was known and accepted by both sides. According to him, the very fact that accounts between the parties were settled at the net discounted amounts, is sufficient evidence that the discounted prices were transaction values and there was no amount paid or payable over and above the discounted price for the transaction in the goods.