Commissioner of C. Ex. Vs. Golden Chemicals Limited - Court Judgment

Excerpt:

.....right in personam. with reference to part ii the persons entered into the contract and dealing the goods must be aware of the terms of the contract. in right in rem it must be known to the public at large. as can be seen from the part ii price list and the same was known to the customers at the time of clearance of the goods, the claim of the assessee cannot be rejected on the ground that trade discount was not known to the public at large. it is settled position now that if the trade discount is known to the buyers at the time of clearance same cannot be disallowed. in the facts and circumstances, we do not find any infirmity in the impugned order passed by the collector (appeals) and accordingly the appeal filed by the department is hereby dismissed.

Judgment:

1. The issue relates to the quantity discount. The Assistant Collector has rejected the claim of the party on the ground that copy of the Scheme of quantity discount was not produced. On an appeal filed by the party, the Collector being satisfied with the claim of the assessee on seeing Part II price list, allowed the appeal on the ground that Trade discount was permissible.

2. Not being satisfied with the finding given by the Collector (Appeals), the department has come before us by way of this appeal.

Shri Srivastava reiterated the grounds taken by the department and submitted that since the copy of the Scheme introducing quantity discount scheme in the Part II price, the Assistant Collector was right in disallowing quantity discount claimed by the assessee. He also urged that the quantity discount claimed by the assessee varies from contract to contract and no exact cut off point of quantity or any scheme has been introduced in the quantity discount.

3. We have carefully considered the submissions made by both sides and perused the records. The only point of dispute to be considered in this case is whether Trade discount was known to the buyer at the time of clearance as Part II price is different from Part I. Part I price list can be considered as right in rem and Part II can be referred to as right in personam. With reference to Part II the persons entered into the contract and dealing the goods must be aware of the terms of the contract. In right in rem it must be known to the public at large. As can be seen from the Part II price list and the same was known to the customers at the time of clearance of the goods, the claim of the assessee cannot be rejected on the ground that trade discount was not known to the public at large. It is settled position now that if the trade discount is known to the buyers at the time of clearance same cannot be disallowed. In the facts and circumstances, we do not find any infirmity in the impugned order passed by the Collector (Appeals) and accordingly the appeal filed by the department is hereby dismissed.