TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Countervailing Duty Included in Assessable Value for Octroi Under Section on Incidental Charges</h1> <h3>Shroff & Co. & Others Versus Municipal Corporation of Greater Bombay and Another</h3> Shroff & Co. & Others Versus Municipal Corporation of Greater Bombay and Another - [1989] 72 STC 150 (SC), 1988 (38) E.L.T. 243, 1988 (2) Suppl. SCR 406, ... ISSUES: Whether countervailing duty is includible in the assessable value for the imposition of octroi under the Bombay Municipal Corporation Act.At what point in time does the liability to pay countervailing duty arise in relation to imported goods stored in bonded warehouses.The proper construction of statutory provisions and rules governing excise duty, countervailing duty, and octroi, particularly the Maharashtra Foreign Liquor (Import and Export) Rules, 1963, and the Bombay Municipal Corporation (Levy of Octroi) Rules.The interpretation of the terms 'import,' 'entry,' and 'place of import' in the context of octroi and excise duties.The relationship between the taxable event for excise and countervailing duties and the timing of payment or collection of such duties. RULINGS / HOLDINGS: Countervailing duty is includible in the assessable value for octroi as it forms part of the 'incidental charges' and is an incident of importation under rule 2(7)(a) of the Octroi Rules and section 105 of the Bombay Prohibition Act, 1949.The liability to pay countervailing duty arises at the point of import, i.e., the physical entry of goods into the taxing territory, and not only upon removal from bonded warehouses for consumption, use, or sale.The provision for deferred payment of countervailing duty under bonded warehouse rules is a matter of administrative convenience and does not affect the incidence or chargeability of the duty at the time of import.The taxable event for excise duty is manufacture or production within the State, whereas for countervailing duty it is import within the State; the timing of payment may be regulated by administrative rules but does not alter the chargeability.The term 'import' in the context of octroi and excise duties means bringing goods into the State for the purpose of use, consumption, or sale, not merely transit or physical entry without commercial purpose.The Division Bench's decision to include countervailing duty in the octroi assessable value was correct and the appeal is dismissed. RATIONALE: The Court applied constitutional provisions under Entry 52 and Entry 51 of List II of the Seventh Schedule, governing octroi and excise duties respectively.The Bombay Prohibition Act, 1949 and the Maharashtra Foreign Liquor (Import and Export) Rules, 1963 provide the statutory framework for imposition and collection of excise and countervailing duties, including bonded warehouse provisions allowing deferred payment.Precedents such as Kalyani Stores v. State of Orissa and Mohan Meakin Breweries Ltd. v. State of U.P. were relied upon to clarify the nature and incidence of countervailing duty as a measure to equalize tax burdens between imported and locally produced goods.Interpretation of the Octroi Rules, particularly rule 2(7)(a), was critical; the inclusion of 'countervailing duty' and 'all other incidental charges' in the definition of value supports inclusion of such duty in octroi valuation.Authoritative dictionary meanings and foreign precedents (e.g., Canada Sugar Refining Co. Ltd. and Wilson v. Chambers) were examined to construe 'import' and 'entry' in a commercial and fiscal context rather than a mere physical or literal sense.The Court rejected the argument that countervailing duty liability arises only upon removal from bonded warehouses, holding that the taxable event occurs at importation, and the bonded warehouse system is a mechanism for administrative convenience in payment, not a deferral of incidence.The Court emphasized avoiding interpretations that would create inconsistent liability timings among importers and upheld the principle that the incidence of tax is distinct from its collection mechanism.Dissent or differing opinion was not recorded; both judges concurred in dismissing the appeal based on the above reasoning.
TaxTMI 
TaxTMI 
