📰 𝗖𝗘𝗦𝗧𝗔𝗧 𝗥𝘂𝗹𝗶𝗻𝗴: 𝗖𝗿𝗼𝘀𝘀-𝗠𝗼𝗱𝗲𝗹 𝗨𝘁𝗶𝗹𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁𝘀 𝗡𝗼𝘁 𝗔𝗹𝗹𝗼𝘄𝗲𝗱 📢 The bench of D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) observed,

"The so-called special discount claimed to have been passed on by the appellant to the dealers is not a trade discount at all so as to be eligible for exclusion from the assessable value of the goods removed as per the provisions of Section 4 of the Central Excise Act.

Therefore, denial of abatement of the said discount from the assessable value of the goods sold is clearly sustainable in law."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: M/s. Toyota Kirloskar Motor Private Limited vs. The Commissioner of Central Tax 𝗖𝗮𝘀𝗲 𝗡𝘂𝗺𝗯𝗲𝗿: Central Excise Appeal No. 20667 of 2018 #TaxLaw #arr4nirc #LegalUpdate

𝗜𝘀𝘀𝘂𝗲: The appellant was accused of cross-model utilization of discounts, applying discounts declared for small/mid-segment cars to luxury model cars like the Fortuner, Innova, and Corolla.

𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: The appellant manufactures various car models and passed on discounts to dealers. The discounts, meant for specific models, were allegedly applied across different models, leading to accusations of undervaluation and short-payment of duty.

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Bangalore Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that the cross-model utilization of discounts is inadmissible. The court upheld the denial of abatement for these discounts from the assessable value,

emphasizing that the discounts were not eligible as trade discounts under Section 4 of the Central Excise Act. However, the tribunal allowed the appeal on the grounds of limitation, stating there was no suppression, misdeclaration, or misstatement of facts by the appellant,

preventing the invocation of a larger period of limitation. 📜 This ruling clarifies that discounts declared for specific car models cannot be applied to other models, ensuring that the assessable value reflects the actual transaction value as stipulated by law.