SESHASAYEE PAPER & BOARDS LIMITED, ERODE vs COLLECTOR OF CENTRAL EXCISE, COIMBATORE

The Supreme Court held that under Section 4 of the Central Excises and Salt Act, 1944, only normal trade discounts paid to purchasers can be deducted for the purpose of calculating excise duty, while commissions paid to agents for services do not qualify as trade discounts. The Court dismissed the appellant's claim for a deduction on account of 'service charge discount', affirming that such payments do not meet the criteria for trade discounts. However, if the purchaser is the same as the indentor, normal trade discounts may be allowed as deductions, subject to relevant considerations.