Anant Raj Industries Ltd. vs Commissioner of Central Excise

S.P.Bharucha, J.-The assessee assails the finding of the Tribunal in relation to quantity discount.

The appellant offered a discount of fifteen per cent of the invoice price to each buyer who made purchases of eighty thousand boxes or more in a period of twelve months. The Tribunal held, "Such discount was not liable to be excluded from the assessable value of the goods sold to those buyers who did not satisfy the said condition of lifting 80,000 boxes or more in the stipulated period of 12 months. The appellants did not pass on any such discount to the buyers who did not satisfy the condition." The Tribunal, therefore, upheld the decision of the excise authorities to that effect.

Learned counsel for the assessee drew our attention to the provisions of Section 4(4)(d)(ii) of the Central Excise Act, 1944, as it then read, and the decision of the Bombay High Court in the case of Good/ass Nerolac Paints Ltd. v. Union of India. That decision of the Bombay High Court dealt with a cash discount offered by the assessee therein and it was held that it should be allowed, irrespective of whether or not each customer availed thereof, because such cash discount was known to the parties concerned prior to the actual delivery of the goods.

In our view, the circumstances in the case before the Bombay High Court and the case before us are entirely different. In the case before us, what is offered is a quantity discount. It is available only to those buyers who purchase more than eighty thousand boxes in a year. It cannot be treated as available to all buyers, regardless of whether or not they purchase eight thousand boxes or more. The case of a quantity discount, which is dependent upon the purchaser buying a certain quantity of the goods, and a cash discount, which is available to all purchasers, is very different. The Tribunal''s view is correct.The civil appeals are dismissed with costs. Appeal dismissed.