Judgment:
ORDER
1. The petitioners in these writ petitions have challenged the show cause notice issued by the first respondent calling upon the petitioners to show cause as to why certain sums specified therein being the duty involved for the period referred to therein after disallowing the cash discount raised by the parties should not be demanded under Section 11A of the Central Excises and Salt Act also called upon the petitioners to submit their written explanation.
2. The matter in issue is directly covered by the decision of this Court in Union of India v. S. S. M. Bros. Pvt. Ltd. 1986 (24) E.L.T. 269 wherein it is held as follows :
'Trade discount by whatever name it is described should be deducted from the sale price if such discount as known to the purchaser at or prior to the removal of goods. In the instant case, the price list prepared by the respondent disclosed that the particular percentage of the total price will be allowed as discount if the payment is made in cash or within certain time. It should, therefore, be taken that the purchasers were aware of the said discount allowed depending upon when the payment of the price is made. Therefore, cash discount was admissible irrespective of whether each customer availed of the said discount or not.'
Following the above decision, all these show cause notices which are impugned in these writ petitions are liable to be quashed.
3. In addition to this, learned Central Government Standing Counsel represented to this Court that he has received instructions from the department to the effect that following the aforesaid decision of this Court these writ petitions could be disposed of.
In fact, the learned counsel produced the letter in C. No. V/36.04/30/97/89 LG dt. 20-12-1991 before this Court which reads as follows :
'Please refer to this office letter of even no. dated 9-12-1991 regarding the fire works cases related to Trade discount issue.
In this regard the High Court judgment dated 8-3-1985 in the case of Union of India & others v. S.S.M. Bros. Pvt. Ltd. and Another reported in the E.L.T. 1986 (24) E.L.T. 269 may please also be referred, as the High Court has held that cash discount is admissible deduction irrespective of whether such discount is uniform or not. On the basis of the above judgment, the fire works batch cases may please be got listed and disposed off early.'
Following the decision of the Division Bench of this Court referred to hereinabove, the impugned show case notices are liable to be quashed and are accordingly quashed. The writ petitions are allowed. No costs.