2015 (1) TMI 174 - AT - Central Excise

CESTAT grants abatement of equalized sales tax, overturns lower decisions

The Appellate Tribunal CESTAT Chennai allowed the appeals, overturning lower authorities' decisions and granting the appellants the right to claim ... Deduction of equalized sales tax from transaction value - abatement towards equalized/average sales tax - transaction value under Section 4 of the Central Excise Act, 1944 - segregation of taxes attributable to excisable goodsDeduction of equalized sales tax from transaction value - transaction value under Section 4 of the Central Excise Act, 1944 - entitlement to claim abatement/deduction of equalized (average) sales tax from transaction value for assessment under Section 4 of the Central Excise Act, 1944 - HELD THAT: - The Tribunal held that the appellants are entitled to claim abatement of equalized sales tax from the transaction value. The conclusion rests on earlier final decisions of the Tribunal in the appellant's own cases which recognised allowance of equalised sales tax as a deduction in computing transaction value. The Revenue's reliance on a decision of the High Court concerning sufficiency of Chartered Accountant's certificate was noted, but none of the earlier final Tribunal orders were challenged by the Department before a higher forum; accordingly the Tribunal declined to take a different view. The Tribunal also recorded earlier precedents which, while allowing deduction, required that such expenses be segregated exclusively in respect of excisable goods for the relevant period; those procedural directions in earlier orders were part of the Tribunal's prior reasoning, but in the present appeals the Tribunal set aside the impugned orders and allowed the appeals following the appellant-specific precedents.The appeals are allowed; impugned orders set aside and appellants entitled to deduction/abatement of equalized sales tax from the transaction value with consequential relief.Final Conclusion: Appeals allowed by applying the Tribunal's earlier final orders in the appellant's own cases: equalized (average) sales tax is deductible from transaction value under Section 4, Central Excise Act, 1944; impugned orders set aside and consequential relief granted. Issues:1. Whether equalized or average sales tax can be allowed for abatement under Section 4 of the Central Excise Act, 1944.Analysis:The judgment by the Appellate Tribunal CESTAT Chennai involved the issue of whether equalized or average sales tax could be allowed for abatement under Section 4 of the Central Excise Act, 1944. The appellants, engaged in the manufacture of Shampoo, claimed abatement towards equalized sales tax provisionally based on the average sales tax on product price. Both lower authorities held that equalized or average sales tax could not be allowed for abatement under Section 4. However, the Tribunal referred to various decisions in the appellant's own case, including Final Orders from 2013 and 2005, where deductions on equalized basis were allowed. The Tribunal reiterated that equalized sales tax could be deducted from the transaction value to determine the assessable value, following precedent decisions accepted by the revenue.In response to the Revenue's argument that the Tribunal did not consider decisions of the High Court, specifically citing the case of Britannia Industries Ltd. Vs. UOI, the Tribunal found that the Chartered Accountant's Certificate and P&L account were not conclusive proof of payments. The Tribunal noted that none of the final orders were challenged by the Department before the appellate forum, leading to the decision to set aside the impugned orders and allow the appeals with consequential relief. The Tribunal maintained consistency with the earlier final orders and disposed of the stay applications accordingly.In conclusion, the Tribunal held that the appellants were entitled to claim the abatement of equalized sales tax from the transaction value, overturning the decisions of the lower authorities. The judgment emphasized the application of precedent decisions in the appellant's own case and rejected the Revenue's argument regarding the High Court decisions. The appeals were allowed, and the impugned orders were set aside, providing the appellants with the relief sought in the matter.