ASSISTANT COLLECTOR OFCENTRAL EXCISE & OTHERS ETC. vs MADRAS RUBBER FACTORY LTD.

The Supreme Court held that the respondent company is not entitled to deduct the TAC/Warranty discount for determining the assessable value of tyres under Section 4(4)(d)(ii) of the Central Excise and Salt Act, 1944, as it does not qualify as a trade discount known prior to the removal of goods. The Court affirmed that while prompt payment discounts are permissible deductions, year-ending discounts do not meet the necessary criteria. The ruling clarified the nature of discounts and their timing in relation to the sale of goods.