Judgment:
1. Learned Commissioner (Appeals) in the impugned order about cash discount observed, "Accordingly I hold that disallowing of cash discount in the impugned order is not justified and is set aside." Learned Commissioner (Appeals) also held, "As regards penalty, since relief is given to the appellant on the issue at 'A' above involving a duty of Rs. 91,317, the penalty imposed in the impugned order of Rs. 1,13,000 is reduced to Rs. 22,000." Being aggrieved by this order Revenue have filed this appeal.
2. The facts of the case in brief are that the respondents herein are engaged in the manufacture of MM blended yarn. They were allowing cash discount at a rate 2.5% to the buyers who made payment within 10 days from the date of receipt of goods. Scrutiny of records however revealed that during the period September 1998 to December 1999 the respondents herein claimed deduction on account of cash discount to the tune of Rs. 4,65,121. However, in some cases payments were not received within time fixed for availing such cash discount. It was also found that they had realised an amount of Rs. 1,09,507 in excess of original price.
Show-cause notice was issued to the respondents herein asking them to explain as to why Central Excise duty amounting Rs. 1,13,317 out of which 91,317 was the amount of duty on cash discount availed by them where these customers did not fulfil the conditions for availment of the same and Rs. 22,000 was the amount of differential duty where goods were intially sold to buyers on cash discount but were rejected by them and subsequently resold to new buyers without cash discount by the respondent, should not be demanded. Whereas the Assistant Commissioner confirmed demand of Rs. 1,31,317 against the respondents herein learned Commissioner (Appeals) set aside the demand of Rs. 20,582 included in Rs. 91,317 which pertains to duty of central excise recovered from the customer corresponding to the cash discount where debit note was raised by the respondent. The appeal filed by Revenue is confined to this amount of Rs. 20,582 as also the reduction in the amount of penalty.
3. We have heard Shri P.K. Jain, learned SDR for Revenue and Shri K.K.Anand, learned Counsel for the respondent. We note in the instant case that the dispute is confined to duty amounting to Rs. 20,582 and reduction in penalty. In so far as the demand of duty of Rs. 20,582 is concerned, the respondents do not dispute stating that duty has already been deposited and appropriated by the authorities below and there was no further deposit required. We agree with this contention of the appellant and, therefore, Revenue's appeal in regard to the duty amounting to Rs. 20,582 is allowed.
4. Insofar as reduction in penalty is concerned we do not see any reason as to why the amount of penalty should be enhanced. In the circumstances, we do not think it necessary to interfere with the impugned order Insofar as reduction in penalty is concerned.