Harish Chander, Member (J)

1. M/s. Seshasayee Paper and Board Ltd. have come in appeal against the order passed by the Collector (Appeals) confirming the finding of the Assistant Collector as to the disallowance of service charges claimed by the appellant as trade discount. This discount was allowed by the appellant to indentors (dealers) to procure more indents. The service charges paid by the appellant were for procuring orders and the Learned Asstt. Collr. as well as Collr. (Appeals) were of the view that the service charges paid by the appellant were brokerage and commission and such payments could not be treated as trade discount within the purview of Sec. 4 of the Central Excises and Salt Act, 1944 read with clarificatory order of the Hon'ble Supreme Court dt. 14/15.11.1983 and hence the service charges/payments claimed by them could not be construed as trade discount given in the normal course of trade and could not be deducted from the normal price for arriving at the assessable value. The lower authorities were of the view that such service charges were not admissible for deduction from the sale price and hence their claim for abatement on account of this discount was rejected. Being aggrieved from the order passed by the lower authorities, the appellants have come in appeal before the Tribunal.

2. The appellant vide his application dated 28.1.1987 duly sworn before Notary Public had made a request for raising additional ground of appeal. Para No. 8 of the said application is reproduced below:

In the circumstances it is prayed that the applicant may be permitted to raise this additional claim for deduction of interest on receivables in the above appeal.

Dr. L.M. Singhvi, the learned Senior Advocate has pleaded that the appellant may be permitted to raise this additional ground, otherwise the appellant shall suffer an irreparable loss. Shri S. Krishnamurthy, the learned S.D.R. who has appeared on behalf of the respondent states that the appellant had claimed the interest on receivable, but the learned Assistant Collector did not deal with the same and thereafter the appellant did not pursue it further, though the appellants had promised to file a detailed separate claim.

3. After hearing both the sides we feel that ends of justice require that the appellants should be permitted to raise this additional ground of appeal. Accordingly, we allow the appellants request.

4. Shri S. Krishnamurthy, Learned S.D.R., states that the service charges discount is not admissible and it is not a trade discount as understood in the normal trade parlance. It is no abatement from the list price and is a commission paid to the indentor for procuring the orders from individual buyers or third parties and Clause 9 of the agreement between the appellant and the indentor provides for commission. It is not available to the wholesale trade; it is available to the indentors and is a commission and not a trade discount. Shri Krishnamurthy, the learned S.D.R. on the issue of deduction of interest on receivable has argued that this issue was raised before the Assistant Collector but the learned Assistant Collector did not give any finding and the appellant had promised to file separate detailed claim, which has not been done so far. He fairly stated that the law of limitation will not apply for the claim of deduction of interest on receivables. He has pleaded for the dismissal of the appeal.

5. In reply, Dr. Singhvi states that commission is also trade discount in view of judgment of Hon'ble Supreme Court in the case of Moped India Limited v. Assistant Collector of Central Excise, Nellore and Ors. reported in MANU/SC/0190/1985. Here the sale is from principal to principal and from principal to agent and there is no evidence on record that this amount was refundable to the manufacturer. He has also argued that interest on receivables may be allowed as a deduction from the assessable value. He has pleaded for the acceptance of the appeal.

6. We have hea