Judgment:
1. The appellant was engaged in the manufacture of patent and proprietary medicaments. It had been permitted by the Collector in terms of sub-rule (1) of Rule 173C, to clear its goods on the basis of value declared in its invoice, i.e. without filing price list and getting it approved. The invoices that the appellant issued to its customers showed free supply of goods to the extent of 5%. They charged the customer for 19 units of its products the twentieth being given free. The Department concluded that this 5% was not admissible as discount, and found the 5% to be a commission payable to "super stockists" and notice was issued demanding duty on this quantity.
2. The assessee in its reply said that although it had supplied the goods free to the customers, it had paid duty on all the products, including the 5% that was given free. The Collector, in the order impugned before us, recorded this submission, but declined to accept it. He relied upon the statements of the appellant's employees to say that the "invoices are not reflecting discount", confirmed the proposal in the notice demanding duty and imposed penalty. Hence this appeal.
3. The contention of the Counsel for the appellant before us is that it had paid duty on all the goods and there has been no short levy.
Although this was attempted to be rebutted by the two Departmental Representatives who represented the Department's case, neither of them could succeed in doing so. Various examples of copies of the invoices enclosed to the appeal were considered by us. The Departmental Representative could not, in any way, prove by applying the mathematical formula, between the sale price and the assessable value, that there has been short levy of the duty, based upon the sale price of the goods as reflected in these invoices. This being the case, the contention of the appellant that there has been no short levy, and the appropriate rate on the assessable value as derived from the sale price has to be accepted.