TaxTMI 
TaxTMI 
2012 (6) TMI 168
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....nfirmed (in Rs.) Date of adjudication / appellate order and the authority Remarks, if any. 1 2 3 4 5 6 7 8 9 10 11 1 E/1983/06 Kinetic Engineering Ltd. , Pune 1-7-1997 to 31-12-2000 14-10-2005 10,12,48,116/- 4,04,52,370/- Pre-paid in March July, 2003 6,07,95,746/- 97,27,319/- 15-2-2006, CCE (Adjn.), Pune III Sales Tax Incentive 1988 Scheme 2 E/149/07 Ballarpur Industries Ltd., Ballarpur April 02 to March 05 24-5-06 3914.40 lakhs 444.70 lakhs Pre-paid in 2004-05 3469.69 lakhs 559.34 lakhs 31-10-2006, CCE, Nagpur 1993 Package Incentive Scheme 3 E/79/08 EPCOS India Pvt. Ltd., Satpur, Nashik 1992 to September, 2003 18-1-2006 - - 2,04,85,452 32,77,672/- 26-10-2007, CCE, Nashik 1993 Package Incentive Scheme 4 E/628/08 Ace Glass Containers Ltd., Malegaon, Nashik 1-4-2001 to 31-10-2005 21-3-2006 16,85,34,751/- 4,66,28,628/- Pre-paid during March 03, 2003 -04, 2004 -05 & Apr. to Nov. 05 12,19,06,123/- 1,95,80,334/- 11-3-2008, CCE, Nashik 1993 Package Incentive Scheme 5 E/324/09 EPCOS India Pvt. Ltd., Satpur, Nashi....
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.... 38 of Bombay Sales Tax Act, 1959 was amended in November, 2002 by substituting the fourth proviso which provided for payment of Net Present Value (NPV) of deferred taxes under the Package Scheme of Incentives. The said proviso read as under:- Provided also that notwithstanding anything to the contrary contained in the Act or in the rules or in any of the Package Scheme of Incentives or in the Power Generation Promotion Policy, 1998 the Eligible Unit to whom an Entitlement Certificate has been granted for availing of the incentives by way of deferment of sales tax, purchase tax, additional tax, turnover tax or surcharge, as the case may be, may in respect of any of the periods during which the said certificate is valid, at its option, prematurely pay in place of the amount of tax deferred by it an amount, equal to the net present value of the deferred tax as may be prescribed, and on making such payments, in the public interest, the deferred tax shall be deemed to have been paid. 2.2 Thus, an option was given to the eligible unit to whom the entitlement certificate was issued for availing of the inventive by way of deferment of sales tax, etc, to prematurely pay in place of t....
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....he appellants under the provisions of Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the said Act. The appellants are before us against the impugned orders. 3. The Ld. Counsel for the appellants submit that in the cases under consideration, the goods in question were sold at the factory gate at the time of removal to the buyers, who are not related persons and the prices were the sole consideration for sale. The only question that needs to be decided is whether for the purpose of transaction value, the amount of sales tax collected but abated under the deferment scheme should be included in the assessable value for the purpose of payment of central excise duty or not. 3.1 The definition of transaction value under Section 4 (3) (d) of the Central Excise Act, 1944 specifically provides that the transaction value does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. The advocate points out that the appellants have been availing the sales tax deferment scheme and rates of sales tax did not vary for the reason that the appellants have availed the deferment scheme. Therefore, the sales....
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....rd of Excise & Customs ( Board in short) in consultation with the Ministry of Law clearly shows that abatement towards sales tax has to be permitted even if sales taxes allowed to be deferred for payment over a period of time or grant of incentive equivalent to sales tax payable has been granted by the State Government to the sales tax assesses. In a subsequent Circular No.671/62/2002-CX dated 09/10/2002 a similar issue was considered and the Board had clarified that only that amount of sales tax is permissible as deduction under Section 4 as is equal to the amount legally permissible under the local sales tax laws to be charged/billed from the customer/buyer. This circular was issued in context of the valuation provisions which came into effect from 01/07/2000 and makes it abundantly clear that if under the laws of the State Government sales tax is allowed to be charged or billed from the customer, the said amount should be allowed as a deduction irrespective of the fact whether the amount paid was by the assessee to the State authorities or not. 3.4 The Ld. Advocate also points out that even for the purposes of Income Tax Act, which allows deduction towards taxes paid for dete....
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.... no precedential value. 4.2 As regards the reliance placed by the appellants on the circulars issued by the CBEC, when the circulars are not in accordance with the provisions of law, such circulars are not binding as has been held by this Tribunal in the case of Uniworth Textiles Ltd., Vs. CCE, Nagpur, 2009 (244) ELT 401 (T). Further, it has been held by this Tribunal in CCE, Indore Vs. Panchsheel Organics, 2002 (139) ELT 319 (T) that when the Supreme Court had given a interpretation to the statutory provisions, such interpretation cannot be ignored on the basis of a contrary interpretation given in the circular issued by the Board. In Ratan Melting & Wire Industries, a constitution of Bench of the apex Court held that a circular which is contrary to the statutory provisions has no existence in law. The learned Special Counsel has further submitted that in Board circular No.643/34/2002-CX dated 01/07/2002 the Board had clarified that as per definition of transaction value, taxes are deductible only on actual basis either paid or payable by the assessee. 4.3 The Ld. Consultant for the department further points out that as regards the contention of the appellants that part of t....
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....oard. The said circular is reproduced below: Valuation where an incentive is provided by the State Government in the form of retention of sales tax by the manufacturers Circular No. 378/11/98-CX, dated 12-3-1998 [From F. No. 6/17/94-CX.1] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject: Determination of assessable value for levy of excise duty where an incentive is provided by the State Govt. in the form of retention of Sales-tax by the manufacturers - Regarding. The undersigned is directed to refer to Boards Circular No. 4/85 (F.No. 6/ 15/85-CX.I), dated 14-3-1985 regarding addition and exclusion of Sales-tax in the assessable value. The trade has raised a doubt about the deductions given in respect of sales tax leviable by State Government, while determining the Assessable value. The following three situations arise as a result of incentive schemes formulated by some of the State Governments for ensuring rapid industrialisation in the backward areas of the States :- i) Exemption from payment of sales tax for a particular period; ii) Deferment of payment of sales tax for a particular....
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.... local sales tax laws to be charged/billed from the customer/buyer. Thus, the Board has clarified that what is permissible to be deducted from the price for determination of value under Section 4 is the amount of sales tax allowed to be charged/billed from the customer/buyer. 5.3 As early as 1955, Government of India General Order (CE No4/55) had, inter alia, clarified that all local taxes such as sales tax, octroi, etc. should be excluded in determining the value for assessment. 5.4 When the provisions of new Section 4 was brought into force with effect from 01/07/2000, the Board had issued instructions vide Circular No.354/81/00-TRU dated 30/06/2000 explaining the provisions of new Section 4 which would come into force from 01/07/2000. In the said instructions in paras 10 & 11, it was clarified as follows: 10. As regards exclusion of taxes while working out assessable value, the definition of transaction value itself mentions that whatever amount is actually paid or actually payable to the Government or the relevant statutory authority by way of excise, sale tax and other taxes, such amount shall be excluded from the transaction value. In other words, if any excise du....
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.... wholesale trade at the time of removal, to dealers (not being related persons) or where such goods are not sold to such dealers, to dealers (being related persons), who sell such goods in retail; (b) where the normal price of such goods is not ascertainable for the reason, that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed. (2) .. (3) . (4) For the purposes of this section, - (a) assesseemeans the person who is liable to pay the duty of excise under this Act and includes his agent; (b) place of removal means (i) a factory o any other place or premises of production or manufacture of the excisable goods; [* * *] (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory and, ] from where such goods are removed; (ba) time or removal, in respect of goods removed from the place of removal referred to in sub-clause (iii) of....
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....ude the duty payable on such goods.] (2) . (3) For the purpose of this section,- (a) assessee means the person who is liable to pay the duty of excise under this Act and includes his agent; (b) .. (c) place of removal means (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty;] [(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;] from where such goods are removed; (cc) time of removal, in respect of the excisable goods removed from the place of removal referred to in sub-clause (iii) of clause (c), shall be deemed to be the time at which such goods are cleared from the factory; (d) transaction valuemeans the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at ....
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....determination of the assessable value. This is for the reason that certainty in taxationis a fundamental canon of taxation; if that canon is not followed, there will be confusion and chaos in the tax administration. If tax liability is made dependent on a future event, such a law can not be enforced or implemented in a fair and reasonable way. That is the reason why in all the provisions relating to determination of value, right from 1944 onwards, it has been provided in the law that the value has to be determined at the time and place of removal of the goods. In the instant case, the appellants claimed deduction towards sales tax as per the liability at the time of removal of the goods. Subsequently if that liability got altered due to changes in law or for any other reason, such alteration cannot have any impact or effect on the assessable value of the goods, which were cleared much earlier. A perusal of the table listed in the opening paragraph of this order clearly shows that the period of dispute involved was from 1992 to 2007-2008. In other words, the goods were cleared during this period. In all these cases, the sales tax liability applicable at the time of removal of the go....
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....as under: Several State Governments have introduced sales tax deferral schemes as a part of the incentives offered to entrepreneurs setting up industries in backward areas. Under these schemes, eligible units are permitted to collect sales tax and retain such tax for a prescribed period. After this period, the sales tax is to be paid to the Government either in lump sum or in installments. 2. Section 43B of the Income-tax Act, 1961, introduced by the Finance Act, 1983, with effect from 1-4-1984 provides inter alia, that a deduction in respect of any sum payable by the assessee by way of tax or duty under any law for the time being in force shall be allowed from the income of the previous year in which such sum is actually paid irrespective of the previous year in which the liability to pay such sum was incurred. Since the introduction of this provision, assesses who collect sales tax, but do not pay the amounts to the Government during the previous year, under the deferral schemes provided by the State Governments are not entitled to the benefit of deduction from their income. 3. Representations have been received from various State Governments and others that cases of def....
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....ts are in jeopardy till the matter is finally decided by the honble apex court and hence they may not have any precedential value. However, it would be relevant to note that the honble apex Court did not stay any of these orders, which implies the law as interpreted in these orders are still valid and enforceable. In all these judgements (cited in para 3.5 supra), the consistent view taken is that abatement of sales tax granted under the state laws or grant of sales tax incentives does not, in any way, affect the admissibility of deduction towards sales tax while determining the value for the purposes of Central Excise levy. We are in respectful agreement with the interpretation of law made in these judgements. On the other hand, the citations relied upon by the Revenue also do not support the Revenues case. In the Adhunik Detergents Ltd., case relied upon by the Revenue there was a sales tax exemption available and no sales tax was payable on the goods and, therefore, it was held that deduction as contemplated in Section 4 (4) (d) (ii) would not be permissible. The Mewar Textile Mills case relied upon by the Revenue also deals with a case where sales tax exemption was granted. The....
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....odity is cleared at the factory gate and not on the price reduced at a subsequent date is unexceptionable. Besides as rightly observed by the Tribunal the subsequent fluctuation in the prices of the commodity can have no relevance whatsoever so far as the liability to pay excise duty is concerned. That being so, even if we assume that the roll back in the price of tyres manufactured by the appellant-company was occasioned on account of the directive issued by the Central Government, that by itself, without anything more, would not entitle the appellant to claim a refund on the price differential unless it is shown that there was some agreement in this behalf with the Government and the latter had agreed to refund the excise duty to the extent of the reduced price. Again in the case of Shri Bhagwati SSK Ltd. Vs. CCE, Pune, reported in 2000 (115) ELT 120 (Tri) this Tribunal held that fluctuations in price of excisable goods subsequent to clearance of goods would not affect assessable value and liability of excise duty already accrued. In the case of Triveni Engineering & Industries Vs. CCE, Meerut, reported in 2002 (148) ELT 1041 (Tri-Del), this Tribunal considered a case wh....