Stay Order Nos. S/934-937/2011-WZB/C-II(EB) in Application Nos. E/Stay/289-292/2010 in Appeal Nos. E/232-235/2010. Case: Mercury Pneumatics P. Ltd. Vs Commissioner of C. Ex., Thane-II. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)
| Case Number | Stay Order Nos. S/934-937/2011-WZB/C-II(EB) in Application Nos. E/Stay/289-292/2010 in Appeal Nos. E/232-235/2010 |
| Counsel | For Appellant: Shri Prakash Shah, Advocate and For Respondents: Shri Y. K. Agarwal, Addl. Commissioner |
| Judges | Shri Ashok Jindal, Member (J) and P.R. Chandrasekharan, Member (T) |
| Issue | Central Excise Act, 1944 - Sections 4, 35F |
| Citation | 2012 (280) ELT 273 (Tri. - Mumbai) |
| Judgement Date | December 01, 2011 |
| Court | CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal) |
Order:
P. R. Chandrasekharan, Member (T)
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These appeals are directed against order-in-appeal No. SB/86-89/TH-II/09, dated 13-11-2009 passed by the Commissioner of Central Excise (Appeals), Mumbai-I. The stay applications are taken up for consideration.
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The appellant Mercury Pnuematics P. Ltd. are manufacturers of goods falling under Chapter 84 of the Schedule to the Central Excise Tariff Act. The appellant sold their products directly to customers as well as through different sales agents appointed for different localities. It was noticed that in some cases, invoices are made directly in the name of customers giving reference of the sales agents involved and in such cases commission is included in the sales amount recovered from the customers and duty is also paid on such commission. However, in some cases where sale is in the name of sales agent, the amount of commission which also includes after sales service charges for the after sales service provided by the selling agents is given to the sales agent directly in the form of a discount which varies from 10% to 20% and these amounts are excluded while computing the taxable value. It was admitted by the appellant that the discounts are given to the sales agent for -
(i) convincing the customer to use their products
(ii) following up with the manufacturer for timely delivery
(iii) Following up with the customers for order amendments if required.
(iv) Collecting payments, and
(v) Providing after sales service whenever requested by customers.
The department was of the view that the amount of discounts given to the sales agents are actually commission which includes the charges of after sales service incurred by the sales agents on behalf of the appellant manufacturer which is required to be loaded in the assessable value for the purpose of levy of excise duty. Accordingly four show-cause notices were issued proposing to demand excise duty on the discounts allowed to the sales agents and the same were adjudicated and confirmed by including the discount in the assessable value of the goods. The appellants preferred four appeals against the said orders and vide the impugned order all these appeals were rejected. Hence the appellant is before us.
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The ld. Advocate for the appellant submits that they are providing discounts varying from 5% to 15% to the various customers in the course of trade. These discounts are granted while negotiating the purchase/sale of the goods and the same are...
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