LexM/S. PUROLATOR INDIA LTD. versus COMMISSIONER OF CENTRAL EXCISE DELHI-ILL
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[2015] 9 S.C.R. 812 A M/S. PUROLATOR INDIALTD. v. COMMISSIONER OF CENTRAL EXCISE DELHI-Ill (Civil Appeal No.1959 of 2006) B AUGUST 25, 2015 [A.K. SIKRI AND R. F. NARIMAN, JJ.] Central Excise Act, 1944: s.4 (as amended in 2000) - c Sales Tax, Cash Discount, Volume Discount - Whether • deductible for arriving at assessable value - Held: Cash discount is deductible from the sale price in order to arrive at the value of excisable goods at the time of removal of goods - However, issue as to Volume Discount and Sales Tax, D matter was rightly remitted back by the Tribunal. Disposing of the appeal, the Court HELD: 1. It can be seen that the common thread run- ning through Section 4, whether it is prior to 1973, after E the amendment in 1973, or after the amendment of 2000, is that excisable goods have to have a determination of "price" only "at the time of removal". This basic feature of Section 4 has never changed even after two amend- ments. The "place of removal" has been amended from F time to time so that it could be expanded from a factory or any other premises of manufacture or production, to warehouses or depots wherein the excisable goods have been permitted to be deposited either with paym~nt of G duty, or from which such excisable goods are to be sold after clearance from a factory. In fact, Section 4(2) pre- 2000 made it clear that where the price of excisable goods for delivery at the place of removal is not known, .. and the value thereof is determined with reference to the H 812 .. PUROLATOR INDIA LTD. v. COMMNR. OF CENTRAL 813 EXCISE DELHI-Ill price for delivery at a place other than the place of re- A moval, the cost of transportation from the place of re- moval to the place of delivery is to be excluded from such price. This is because the value of excisable goods un- der the Section is to be determined only at the time and place of removal. Even after the amendment of Section B 4 in 2000, the same scheme continues. Only, Section 4(2) is in terms replaced by Rule 5 of the Central Excise Valu- ation (Determination of Price of Excisable Goods) Rules, 2000. [Para 14) [829-B-F] 2. It can be seen that Section 4 as amended intro- duces the concept of "transaction value" so that on each removal of excisable goods, the "transaction value" of such goods becomes determinable. Whereas previously, c the value of such excisable goods was the price at which D such goods were ordinarily sold in the course of whole- sale trade, post amendment each-transaction is looked at by itself. However, "transaction value" as defined in sub-clause (3)(d) of Section 4 has to be read along with the expression "for delivery at the time and place of re- E moval". It is clear, therefore, that what is paramount is that the value of the excisable goods even on the basis of "transaction value" has only to be at the time of re- moval, that is, the time of clearance of the goods from F the appellant's factory or depot as the case may be. The expression "actually paid or payable for the goods, when sold" only means that whatever is agreed to as the price for the goods forms the basis of value, whether"such price has been paid, has been paid in part, or has not G been paid at all. The basis of "transaction value" is there- fore the agreed contractual price. Further, the expres- sion "when sold" is not meant to indicate the time at which such goods are sold, but is meant to indicate that goods are the subject matter of an agreement of sale. H 814 SUPREME COURT REPORTS [2015) 9 S.C.R. A Cash discount is something which is "known" at or prior to the clearance of the goods, being contained in the agreement of sale between the assessee and its buy- ers, and must therefore be deducted from the sale price in order to arrive at the value of excisable goods "at the time B of removal". [Para 18] [832-0-H; 833-A-B] c Union of India v. Bombay Tyre International Limited 1984 (17) ELT 329 (SC); Government of India v. Madras Rubber Factory Ltd. 1995 (77) ELT 433 (SC) - relied on. Commissioner of Central Excise, Jaipur-II v. Super Synotex (India) Ltd. and Ors. 2014 (301) ELT 273 (SC) - distinguished. D Deputy Commissioner of Sales Tax (Law) Board of Rev- enue (Taxes), Ernakulam v. Advani Oorlikon (P) Ltd., 1981 (8) ELT 801 (S.C.)- referred to. Case Law Reference E 1984 (17) ELT 329 (SC) relied on. - Paras 7, 15, 25 1995 (77) ELT 433 (SC) relied on. Paras 7, 16, 25 2014 (30
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