ORDER
C.N.B. Nair, Member (T)
1. This appeal is directed against orders rejecting the appellant’s request for provisional assessment of Sewing Thread manufactured and cleared by them to their Depots.
2. During the hearing of the case, Id. Counsel for the appellant has pointed out that there is no sale at the time of removal from the factory.
3. They are merely transfer of goods to appellant’s depots. Sales are from the depots. Different discounts are also given from the depots that is the reason for the appellant’s request for provisional assessment at the time of removal from the factory. Ld. Counsel has submitted that the rejection of the request is not justifiable in law at all. It is his submission that the original authority ordered to pay duty on “assessable value which also include the discounts”. This order is clearly contrary to law. The order of the Commissioner (Appeals) is also not justifiable since he has confirmed the order-in-original with the observation that any relief granted would not be meaningful.
4. We have perused the records and heard Id. SDR also. The assessee’s request for provisional assessment had been made on very legitimate and legal grounds. The same should not have been rejected. The orders passed by the lower authorities are not sustainable at all. Direction to pay duty on an assessable value that includes discounts is clearly illegal. Valuation provisions provide for deduction of discounts from sale price so as to arrive at assessable value. Assessment is to be on net price. Payment of duty on a transfer price involves risk to revenue also, inasmuch as the price indicated in the transfer documents is purely notional. Even under provisional assessment, a purely notional price should not be basis for assessment. In these circumstances, we set aside the impugned orders and grant permission to the assessee to pay duty on provisional assessments basis at the time of removal of the goods from factory to the depots. The assessee shall comply with all procedural requirements to be decided by the jurisdictional authority. While this shall be the arrangement for future assessments, in regard to the assessments already made, it is directed that both sides shall review the position immediately and take action to claim refund/take recovery action.