CCE Vs. AGSAR PAINTS (P) LTD.

JUDGEMENT

(1.) BOTH these Revenue appeals arise from OIA No. 194 & 195/96 dated 31.5.1996 passed by the Commissioner (Appeals), Trichy holding that the assessee is entitled for reduction of 2% in the value of clearances where payments are received after expiry of 30/45 days fall under the category of sale under prompt payment discount while the Asst. Commissioner had held that this 2% value is required to be loaded in the assessable value. The Commissioner (Appeals) while allowing the assessee's contention to grant relief of prompt payment discount relied on the ratio of the Apex Court judgment rendered in the case of Govt. of India v. Madras Rubber Factory : 1995 (77) ELT 433 and that of CBEC Circular F. No. 6/25/93 -CX.1 dated 31.12.1994. He also relied on his earlier judgment rendered in OIA No. 110/95 (MDU) dated 22.8.1995. Revenue contends in this appeal that the impugned order is not correct and that AC was right in not granting abatement of 2% of value towards prompt payment discount since the duty has not been actually passed on to the buyers who failed to clear their liability within the stipulated period and hence no abatement is allowable.

(2.) RESPONDENTS have sought for deciding the case on merits in terms of written submissions. They contend that prompt payment discount is a discount permissible under Rule 5(4)(d)(ii) (sic) of Central Excise Rules, as same was known prior or at the time of removal of goods sold or contracted for sale and hence deductible from the assessable value. They cite the following judgments: - -

(3.) THEY have also produced copy of the order passed by this Bench in the case of West Coast Paper Mills Ltd. - - : 2000 (122) ELT 859 wherein it has been held that prompt payment i.e. cash discounts are allowable as abatement from the assessable value across the boards in all cases and are not restricted only to such buyers who are actually availing of the facility of payment in cash in terms of Sec. 4 of CETA. While passing this judgment, the Bench has relied on the judgment of the Tribunal and Bombay High Court. They have also produced copies of the judgments cited above. We have carefully considered the Revenue's contention in the appeal memo and have gone through the written submissions and the citations referred to by the assessee. We notice that the Asst. Commissioner had rejected their plea to grant 2% discount which the appellants are granting to all the customers in terms of the contract. The AC had directed them to reload the same in the assessable value. However, the Commissioner (Appeals) noting the Apex Court judgment and his earlier order held that for prompt payment, the benefit is required to be granted. This matter has been examined by the Tribunal in large number of cases and the judgments cited by the assessee have been examined by us and we notice that the view expressed is consistent. In the latest judgment of this Bench in the case of West Coast Paper Mills Ltd. (Supra), the Tribunal have examined again all the cited judgments and the categorical finding has been given that prompt payment i.e. cash discounts are allowable as abatement from the assessable value across the board in all cases and are not restricted only to such buyers who were actually availing the facility of payment in cash. Therefore, the ground taken that there was delay in payment and for that reason 2% discount is required to be loaded in the assessable value no longer survives and the grounds raised by Revenue is not in terms of the ratios laid down by all the judgments noted above. There is no merit in the Revenue appeals and the same are rejected.