Case Law Details
CA Urvashi Porwal
Brief of the Case
In the case of M/s Shyam Steel Industries & Anr. Vs. Deputy Commissioner of Central Excise and Service Tax & Ors, it was held by Calcutta High Court that discount of any type made known prior to the clearance of the goods but quantified subsequently and passed on to the customers is an admissible deduction from the transaction value and as such the assessment for such transactions may be made on a provisional basis.
Brief Facts
In this writ petition, the petitioner prays for a direction in the nature of mandamus directing the respondents to allow clearance of excisable goods manufactured/to be manufactured by the petitioners under provisional assessment in terms of Rule 7 of the Central Excise Rules, 2002. The petitioner company is engaged in the business of manufacture and sale of; inter alia, MS Billets and TMT Bars. The TMT Bars cleared from the company’s factory are either supplied directly to the customers or to a network of dealers engaged in re-sale thereof. In accordance with the conventional practice prevailing in the industry, the petitioner company, in order to boost the sale of finished goods through the dealers offers various promotional schemes in the form of turnover/quantity discount, cash discount etc. While these discounts are made known to the dealers even before the clearance of the finished goods from the factory by way of claims notified and published from time to time, quantification thereof is possible only at the end of the notified period. The dealers fulfilling the qualification conditions become eligible to get duty discount at the end of the notified period, processed by way of credit notes.
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