TaxTMI 
TaxTMI 
2010 (9) TMI 288
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, the rate of 16% ad valorem on HDPE bags roughly comes to Rs. 18/- per Ton of cement and they availed and utilized said credit for payment of duty towards their final product i.e. cement cleared in bagged condition. As such, he submits, in essence, duty paid out of their pocket comes to Rs. 332/- PMT in respect of cement cleared in bagged condition. The appellant also cleared the cement in bulk/loose condition to their bagging plants located at Magdalla (Surat), Navi Mumbai and Mangalore, where they are further bagged. In terms of Notification No. 15/99-C.E., dt. 26-3-99, the concessional rate of duty of Rs. 332/- PMT has been prescribed on the cement cleared from the factory in bulk/loose condition for further packing in their bagging plants, subject to observance of certain conditions. As the appellant was clearing the cement in loose form also, duty @ Rs. 332/- PMT was being paid on the same. As per the learned advocate, this difference of Rs. 18/- per Ton in respect of duty leviable on packed cement and loose cement is on account of availability of Rs. 18/- as Modvat Credit in respect of bags used by them in their factory. 3. The loose cement cleared by the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....scribed lower rate of duty of Rs. 332/- PMT. As such, submits the learned advocate that where bagged cement if cleared to the customer from a factory or the depot, the amount of duty paid by them essentially remains the same. By drawing our attention to the commercial invoices raised at Magdalla depot, he explained that the same were computer generated invoices and carried the following words : "Central Excise duty @ Rs. 350/- PMT was included in the price". 6. He submits that there was an error in the computer showing Rs. 350/- PMT, which error was corrected by them subsequently in October 2000. He submits that the plants were not required to pay any duty of Excise and as such reflection of Rs. 350/- PMT in the invoices generated at the plants, cannot be held to be covered by the provisions of Section 11D, which only is applicable to person liable to pay duty. For the above proposition, he draws our attention to Mumbai High Court judgment in the case of Mather & Platt Ltd. v. State of Maharashtra as reported in (1983) 053 STC 104. He also submits that inasmuch the entire contract price with the buyer was inclusive of Excise duty, it cannot be said that the appellant hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has collected any amount in excess of duty paid, such excess collection represented as duty of Excise, is required to be paid to the Revenue. Simple and plain interpretation of the above provision leads us to observe that the Section provides for payment of such excess amount collected as duty of Excise, without going into the economics of the contract price or the fact as to whether such excess amount was profit element of the price or not. The language of said Section is un-ambiguous and no legislative intent is required to be read into. Learned advocate's plea that the difference of Rs. 18/- PMT was created by the legislation with a purpose and the intention was to levy less duty on the loose cement by an amount equivalent to the Modvat Credit available on these bags cannot be appreciated. As already discussed, the provisions of Section 11D are very clear and unambiguous, no support from the legislative intent is required to be taken. Admittedly, the appellant have reflected an amount of Rs. 350/- as element of Excise duty in their commercial invoices raised from such depot and have actually paid @ Rs. 332/- to the Revenue. The difference of Rs. 18/- PMT is required to be paid t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the Government by way of tax does not convert the amount collected by the seller into a tax. If a purchaser from whom his seller has so recovered the amount of tax recoups such amount paid by him from his own purchaser when he comes to resell the goods, he is not prohibited by the Act from doing so, so long as he does not represent to his own purchaser that this is the amount of tax which he was liable to pay by way of tax. In thus recouping himself he is really increasing his sale price with a view to reimburse himself for an extra item of cost. There is no prohibition under the Act against a reseller thus reimbursing himself by increasing his selling price and in our opinion whether he does so by increasing the selling price or by showing the amount by way of tax collected from him by his own vendor as a separate item in the bill makes no difference. So long as the purchaser is not led to believe that the amount charged to him is the amount which the seller would be liable to pay as tax to the Government when he is not liable to pay it, there would be no contravention of Section 46(2). In the type of bills, we are considering the representation made by the applicants was that ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ill calculate the aggregate of the amount which according to our judgment was collected by the applicants in contravention of the said Section 46(2) of the Act and would only direct forfeiture of such amount." 15. It again becomes clear from the above paragraph that the amount collected by the applicant from their purchaser and shown as surcharge on account of sales tax in the bills in respect of relevant transactions of the sales was required to be held in contravention of Section 46(2) of Bombay Sales Tax Act. In any case, we find that the ratio of the above decision, being in respect of the altogether different provisions of law, would not be strictly applicable to the provisions of Section 11D. As such, no reliance can be placed upon the same. We, accordingly, upheld the confirmation of demand of duty of Rs. 10,92,639/- in respect of said Magdalla depot of the Company. Accordingly, the appeal No. 1265/2006 is rejected. 16. It is seen that identical proceedings were initiated against other two depots of the appellant located at Navi Mumbai and Mangalore. Our attention has been drawn to show cause notice dt. 1-7-03 issued to the said unit, which makes reference to....