Whether excise duty is leviable on trade discount?

PJ/Case Law/2014-15/2116

Case:-M/s MAHANAGAR GAS LTD Vs COMMISSIONER OF CENTRAL EXCISE, MUMBAI-II

Citation:- 2014-TIOL-462-CESTAT-MUM

Brief facts:- The appeal and stay application are directed against the Order-in-Original no. 09/RN/COMMR/MII/2013-14 dated 24.09.2013 passed by the Commissioner of Central Excise, Mumbai-II. Vide the impugned order, excise duty demand of Rs.1,68,90,942/- has been confirmed against the appellant for the period April, 2011 to October, 2011 along with interest thereon. Aggrieved of the same, the appellant is before Tribunal.

The short question involved in this appeal is whether the trade discount passed on by the appellant to Oil Marketing Company can be considered as trade discount or not and whether excise duty is leviable on this amount considering the same as part of the value of the goods sold.

Appellant’s contentions:- The learned Counsel for the appellant submits that this is the ninth appeal on the same issue, which has come before this Tribunal. Huge demands have been made by the Revenue authorities since June, 03 onwards. In all the 8 appeals, the appellant had sought stay of the demands and this Tribunal after considering the submissions made had ordered pre-deposit of about 6% of the duty demand confirmed and, therefore, he pleads that in the present case also, pre-deposit of 6% of the duty confirmed be ordered. Alternatively, he submits that the case be transferred to the other Bench of the Tribunal, who had decided the matter earlier. The learned Counsel also points out that except for the demand for the period April, 2003 to March, 2008, all the other demands were for the normal period of time.

Respondent’s contentions:- The learned Addl. Commissioner (AR) appearing for the Revenue, on the other hand, submits that when the last appeal was heard by this Tribunal for the period July, 2010 to January, 11, this Tribunal vide order dated 21.1.2014 had directed the appellant to make pre-deposit of 50% of the duty confirmed within eight weeks. Therefore, he pleads that in the present case also, the latest decision of the Tribunal be followed and the appellant be put to terms accordingly.

Reasoning of judgment:- We find that when the stay petition came up for consideration before this Tribunal on the last occasion on 21.1.2014, this Tribunal after considering the submissions made by both the sides, directed the appellant to make a pre-deposit of 50% of the duty confirmed on the ground that on the earlier decisions, pre-deposit was ordered taking into account the demand for the normal period of time. In the present case, the entire demand is for the normal period of time. It is a well settled position that while considering various decisions on a matter, the latest decision should be preferred as that would have taken into account all the previous decisions on the subject. Therefore, following the latest order dated 21.1.2014, we direct the appellant to make a pre-deposit of 50% of excise duty confirmed within a period of eight weeks.

Decision:- Pre-deposit of 50% of excise duty ordered.

Comment:- The stay application was partly allowed by following the latest stay order in the appellant’s own case. The important analogy that is drawn from this case is that the latest decision is preferred as it takes into account all the previous decisions on the matter. Accordingly, the latest stay order directing 50% pre deposit was relied upon and followed.

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PJ/Case Law/2014-15/2116

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