Per JUSTICE UL. BHAT:

These appeals arise in relation to orders passed by the Assistant Collector on four price lists, the first having been filed on 20-7-1989 and the last on 27-11-1990. The Asstt. Collector issued show cause notice indicating that trade discount of 29%, cash discount of 2.5 % referred to in the price lists and the cost of wooden crates were not to be deducted from the price. The show cause notice was rebutted by the manufacturer (appellant in appeal No. E/2522/93-A and respondent in appeal No. E/705/93-A). The Asstt. Collector passed an order allowing trade discount of 26% out of 29% and disallowing cash discount and deduction for cost of wooden crates. In appeal, Collector (Appeals) allowed balance 3% trade discount out of 29% and 2.5% cash discount and confirmed the disallowance of cost of wooden crates. The department being aggrieved has filed an appeal in regard to the trade discount and the cash discount, while the manufacturer has filed an appeal regarding the disallowance of cost of wooden crates.

2. We have heard the learned counsel appearing for the manufacturer and the Senior Departmental Representative. The following questions arise for consideration:-

(i) Whether cash discount of 2.5% is allowable?

(ii) Whether deduction of 3% trade discount granted to wholesalers in regard to goods directly sold to sub-dealers is allowable?

(iii) Whether deduction for cost of wooden crates is allowable?

POINT NO. I

3. The price lists declared that cash discount of 2.5% would be granted to customers who pay the price in cash within seven days of the sale. The Collector (Appeals) allowed the reduction of price list price by 2.5% irrespective of whether customers actually availed the discount or not. The revenue contends that this deduction could have been allowed only to the extent to which it was actually granted to customers who availed the discount and the price generally could not be depressed to this extent. Reliance is placed on the decision of the Tribunal in R.R. Paints Vs. Collector of Central Excise, Ahmedabad, 1987 (28) ELT 478 where it was held that cash discount is admissible deduction if passed on to the consumer. Learned counsel for the manufacturer points out that there are decisions of the Bombay and Madras High Courts to the contrary and they were not brought to the notice of the Tribunal in the earlier case. The earliest decision is that of the Bombay High Court in Jonson and Nicholson (India) Ltd. and another Vs. Union of India and others, 1984 (17) ELT 4 (Bom.). Dealing with the contention of the revenue, the High Court held that cash discount as mentioned in the price list of the manufacturer must be allowed irrespective of whether it was actually availed of by the customers. This decision was followed by the Madras High Court in Union of India and others Vs. S.S.M. Bros. Pvt Ltd. and another, 1986 (24) ELT 269 (Mad.). Both these decisions were followed by the Bombay High Court in Goodlass Nerolac Paints Ltd. Vs. Union of India, 1993 (65) ELT 186 (Bom.).

We are bound to follow these decisions of the High Courts. We, therefore, hold that the cash discount of 2.5% is liable to be deducted from the price list price irrespective of the fact that all the customers might not have availed the benefit of the same.

POINT NO. II

4. Letter dated 1-11-1986 of the manufacturer to its wholesalers contained the offer to sell shock absorbers to the wholesale dealers on terms and conditions indicated therein. The latter stated that sale shall be on principal to principal basis, that the dealers shall not profess to be agents for the manufacture of that they will be given total discount of 29% on the recommended price, that 23 % discount will be given initially at the time of raising the invoice and 6% will be given at the end of the year on the total value of goods purchased and cash discount of 2.5% will be given for payment against delivery. As per the trade pattern, where sales are effected by the manufactur