Case: Rallis India Limited Vs. Union of India

Since, however, the matter has now to be sent back to the Assistant collector, only a few facts may be stated as under2 ) THE First Petitioner Company manufactures table fans. In respect of the said articles of manufacture, they had submitted certainIn the light of the Judgments of the Supreme court, the Petitioner Company submitted the amendedand claimed deduction for the period commencing from 1st September 1971. The deductions claimed were on account of :(i) Marketing and Distribution; (ii) Advertising attributable to selling activity; (iii) Freight; and (iv)March 1977, the Petitioner Company submitted a furtherclaiming deduction on account of the expenses incurred for packing. In July 1977, the Superintendent refused to accept theand directed the petitioners to file a freshstrictly in accordance with the provisions of Section 4 of the Central Excises and Salt Act, 1944. The petitioner Company thereupon filed a freshwithout claiming deduction on account of post manufacturing expenses, but under protest. The petitioners claimed refunds subsequently. Under three different orders passed in March, April and May 1981 the petitioners claim for refund was3 ) THIS writ petition was filed in June, 1981. At the stage of admission, certainorders were passed. Subsequently, in the light of the Supreme Court Judgment in the case of Union of india and Others etc. v. Bombay Tyres International Ltd. etc.1983 (14) ELT 1896 (S. C. ). Pendse j. passed an order on 14th December 1983 directing the Assessing Authority to permit the petitioners to submit their statements of deductions and amendments in respect of thealready filed. The Assessing Authorities were directed to consider the Petitioners claim for deductions under the HeadingsInterest on Book Debts; (ii) Averaged Freight; (iii) Discount and Commission; and (iv) Packingtogether with other and further claim of deductions admissible in view of the Supreme Court judgment in the said case of Union of India v. Bombay Tyre International. Under the said order dated 14th December 1983, the authorities were directed to finalise theand determine the admissibility under different heads claimed in respect of all the refund4 ) PURSUANT to this order passed on 14th December 1983, the Assistant Collector has passed the impugned order on 4th August 1984. In view of the order dated 14th December 1983, the first petitioner/company produced the necessary material in support of its claim under the various heads enumerated above. However, the Assistant Collector has observed in Para 9 of his order that the claim for deductions under the headings : (1) Commission; (2) Cost of packing; and (3)Interest on Book Debts was, for the present, withdrawn without prejudice to their right to claim the same in the event of the Supreme Court allowing any of these claims of5 ) WE have heard Mr. Bharucha and Mr. Sethna, the learned Counsel for the rival parties.

Court's reasoning:
In view of this position, it is not possible for us to accept the finding of the Assistant Collector that the first Petitioner/company was prepared to withdrawn the claim of deduction under the said headings of Commission, Cost of Packing and Interest on Book Debts. The said findings is wholly erroneous. It is, therefore, necessary to direct the Assessing Authority to consider the case of the Petitioner Company for deduction on account of the said three items.(8 ) IN view of the above three Judgments, it is not possible for us to accept the conclusion of the assistant Collector that in respect of the claim of cash discount beyond 10th July 1983, the same was barred by limitation. At any rate, as far as this Court is concerned, we direct the Assistant collector to consider the claims of the petitioners for deduction on account of cash discount as claimed by the petitioners for the periodonwards. As stated earlier, the petitioner company has been filing the revisedand had been agitating the claim for refund right from 1976. Accordingly, the Assistant Collector is directed to reconsider the case of the petitioner company in respect of the deduction on account of the cash discount claimed from the period from 1st September 1971is difficult to accept this reasoning of the Assistant Collector. If quantity/target discount are admittedly given and it they vary from region to region as also within the same region from dealer to dealer, in our view, no objection can be taken to such a practice. The only reason assigned by the Assistant Collector for rejecting the claim is that the quantum of discount was not uniform. We are not at all in agreement with the view expressed by the Assistant Collector and we hold that the claim for deduction on account of quantity/target discount will have to be considered on its own merit irrespective of the fact that the quantum of discount varies from region to region and also within the same region from dealer to dealer. The Assistant Collector was not justified in rejecting the said claim on that ground.