Final Order No. 3516/98-WRB/C-I arising from in Appeal No. E/6029/92-A. Case: Asian Chemical Works Vs Commissioner of C. Ex., Mumbai-I. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Final Order No. 3516/98-WRB/C-I arising from in Appeal No. E/6029/92-A |
| Counsel | For Appellant: Shri Bulchandani, Advocate and For Respondents: Shri S.V. Singh, JDR. |
| Judges | Shri K.S. Venkataramani, Vice President and J.N. Srinivasa Murthy, Member (J) |
| Issue | Central Excise Act, 1944 - Section 4 |
| Citation | 1999 (112) ELT 581 (Tribunal) |
| Judgement Date | July 28, 1998 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
K.S. Venkataramani, Vice President, (West Zonal Bench At Mumbai)
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The facts in brief of the case are that the appellant is engaged inter alia, in the manufacture of goods like saccharin, food colour preparations, basic food colours, flavours and aromatic chemicals etc. falling under Chapters 29, 32, 33 and 38 of the Central Excise Tariff Act, 1985. These goods are cleared to different consumers directly or through the dealers. Discount at different rates are given depending upon the quantity and the type of the products ordered by the customers. Dispute arose regarding the higher discount granted to two dealers viz., M/s. Gujarat Essence Mart Pvt. Ltd. (hereinafter referred to as GEM) and M/s. Forkey Enterprises (hereinafter referred to as FE). It is claimed by the appellants that these two customers lift bulk of their products ranging from 50 to 60% of their sales. While the discount given to other dealers range from 8.5% to 13% in the case of saccharin and 12.5% to 20% on products other than saccharin, these two dealers viz., GEM and FE are allowed a discount of 161/2 and 25% respectively on saccharin and other products respectively, having regard to the bulk quantity lifted by them. Like others these two buyers have also been granted 60 days credit from the date of invoice. A show cause notice was therefore issued alleging that on verification of balance sheet/profit & loss account it was found that one of the directors of the appellant company is interested as director of GEM and one of the directors is interested as a partner in FE, that GEM is a selling agent of the appellants as one of the directors is common between the appellants and the GEM, that on 25% trade discount is offered to GEM on the goods other than saccharin, the concession granted on saccharin is not passed on to other buyers and that these two buyers are the only buyers with major discount. Therefore, the GEM and FE are alleged to be related buyers/persons under Section 4(4)(c) as they are associated with the appellants, that they have control in the business of each other and that hence for the goods sold to or through related persons, the assessable value should be taken for payment of duty at the price at which the goods are sold by such two related persons. Denying the discount granted to these two buyers the short recovery was sought to be recovered through the show cause notices. The order-in-original relating to the denial of higher discount...
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