TaxTMI 
TaxTMI 
2010 (7) TMI 902
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.... projects to which deemed export status was extended under the Import and Export Policy of the Government of India. The petitioner stated to have secured a contract of M/s. Oil India Limited vide order No. 130299/DJA, dated February 22, 1990, which was entitled for deemed export benefit status. Under the said contract in clause 4.0 under the heading "duties and taxes", it was specifically agreed to the effect that "no excise duty is leviable as per deemed export benefit notice. Necessary project authority's certificate is enclosed herewith". The petitioner while effecting supplies to M/s. Oil India Limited stated to have raised invoices claiming only the price plus Central sales tax. The excise duty was neither claimed in the invoices nor the purchasers were debited towards that. According to the petitioner, M/s. Oil India Limited did not also pay the excise duty. The petitioner stated to have however incurred the excise duty and by virtue of the deemed export status to the extent of the duty paid towards excise, the petitioner was stated to have been granted cash assistance based on submission of appropriate claims. While so, the assessment for the year 1991, which was complete....
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....sh Limited v. Assistant Commissioner (CT) [2002] 128 STC 446 (Mad) which followed the decision Neyveli Lignite Corporation Ltd. v. Commercial Tax Officer reported in [2001] 124 STC 586 (SC) in support of his submissions. As against the abovesaid submission, Mr. Naziruddin, learned Special Government Pleader (Taxes), in his submissions contended that under clause 4.0 of the purchase order, when it was specifically referred to the effect that excise duty was not leviable as per deemed export benefit notice and the necessary certificate was also enclosed, the cash assistance received by the petitioner from the Government of India forms part of the sale price and therefore, the assessing authority was justified in passing the revised order dated March 26, 1996. According to the learned Special Government Pleader, the definition of "sale" under section 2(g) of the Central Sales Tax Act and "sale price" under section 2(h) of the Act when applied to the nature of the transaction between the petitioner and the Oil India Limited would include the Central excise duty paid by the petitioner and consequently, the petitioner was bound to pay the tax on the value of the Central excise duty....
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....the Central excise duty in the form of cash assistance, the buyer, viz., Oil India Limited would have made good the loss to the petitioner. In other words, by virtue of the categoric terms contained in the purchase order, the petitioner agreed to supply goods to its purchaser, viz., M/s. Oil India Limited by agreeing to bear the Central excise duty payable on such supplies. In order to ensure that, the purchaser, viz., M/s. Oil India Limited retains its right as the owner of the goods supplied on completion of the sale. Necessary certificate called as project authority certificate is also annexed with the purchase order to confirm the position that the purchaser, viz., Oil India Limited is engaged in a project which has been accorded the status, viz., deemed export status. In the said circumstances, when we apply section 2(g) of the Act, which defines "sale" and section 2(h) which defines "sale price", we are convinced that in the case of supply effected by the petitioner to its purchaser, viz., M/s. Oil India Limited, the transfer of property in goods passed on to the purchaser for the price fixed in exclusion of Central excise duty, which the petitioner agreed to bear. As f....
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....ny amount by way of subsidy. There is no agreement between the parties for any further amount to be paid, than what is paid by the purchaser at the time of the sale. 'Turnover' is defined in section 2(xxvii) of the KGST Act as meaning the aggregate price for which goods are either bought or sold, supplied or distributed by a dealer. 'Sale' is defined in section 2(xxi) as meaning every transfer, whether in pursuance of a contract or not, of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or for other valuable consideration. The essential contract between the parties, namely, the seller and the purchaser of fertilisers, is only for payment of the price subject to the maximum fixed by the Central Government and not for any other. This being the contract, any other sum received by the seller-petitioners for a different purpose and not as consideration for the sale, is not part of the sale price, and therefore of their turnover. The fact that the amount of subsidy is determined with reference to the quantum of fertilisers cleared from the factory on which considerable stress was made by the Government Pleader, does no....
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....to be in public interest. Therefore, in every respect whatever principles laid down in the decision in Neyveli Lignite Corporation Ltd. v. Commercial Tax Officer, Cuddalore reported in [2001] 124 STC 586 (SC) would squarely apply to the case on hand and consequently the entitlement of the petitioner in seeking for exclusion of the Central excise duty from the sale price on working out the tax liability under the Act was perfectly justified. In the decision in Indian Potash Limited v. Assistant Commissioner (CT) [2002] 128 STC 446 (Mad) on more or less identical situation, the Division Bench followed the decision in Neyveli Lignite Corporation Ltd. v. Commercial Tax Officer, Cuddalore reported in [2001] 124 STC 586 (SC). The Division Bench has expressed its view as under (page 450 in 128 STC): "Having regard to the pronouncement of the apex court that the price is that which the seller receives from the purchaser and that the subsidy received by the seller from the Government in terms of an administered scheme which does not provide that the amount paid by the Government is being paid on behalf of the buyer, the amount of the 'concession' received by the petitioner from the Go....