TaxTMI 
TaxTMI 
2016 (4) TMI 55
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....nts, turn over tax, tax paid under section 3(4) of TNGST Act and cash discounts and trade discounts and Pre Delivery Inspection (PDI) and Free Service Coupon (FSC). Accordingly, provisional assessment was ordered for financial years 1999 to 2004 05. The adjudicating authority finalized the provisional assessment with the respective Order-in-Original for the respective financial years and consequently demanded differential duty and also ordered for refund for the excess payment which is as under:- S. No. Appeal No. Order-in-Original No. and Date Period of finalization Amount of duty demanded (in Rs.) Amount of refund given to filing of separate refund claims 1. 70/07 (M-III) 8/2007 dt. 31.7.2007 1999-2000 56,88,204/- --- 2. 113/70 (M-III) 21/2007 dt. 27.9.2007 2000-2001 5,57,57,825/- 1,66,37,990/-A. Cess 98,851 3. 114/07 (M-III) 22/2007 dt. 27.9.2007 2001-2002 3,96,72,190/- A.Cess 3,09,939/- -- 4. 115/07 (M-III) 23/2007 dt. 27.9.2007 2002-2003 4,70,25,781/- A.Cess 3,39,414/- NCCD: 95,756 35,80,771/- A.Cess: 27,975/- NCCD 1,89,154/- 5. 116/07 (M-III) 24/2007 dt. 27.9.2007 2003-....
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....ere to dealers located outside Tamil Nadu. He submits that they are on appeal only on four issues arising out of the same order. For the purpose of deciding the issue, Appeal No. E/482/2009 is taken for argument and discussion. 6. On the first issue, that is equalized freight, it is submitted that the issue pertaining to the period 1.7.2000 to 28.2.2003 where the vehicles are cleared from depot to dealers premises or from factory to dealers premises. He submits that as per section 4 of Central Excise Act, 1944 freight is to be excluded from the transaction value. Since the equalized freight will be known at a later date. Accordingly, they claimed deduction. Department disallowed the claim on the ground that it is not separately indicated in the invoice at the time of removal. He relied on the decision of the Tribunal in their own case vide Final Order No. 1860/2006 dated 3.11.2006. He has also relied on the following case laws for equalized freight:- (iv) The Indian Hume Pipe Co. Ltd. Vs. CCE -2005-TIOL-431-CESTAT-MUM (v) CCE Vs. Shreyans Industries 2013 (296) ELT 537 (vi) Reliance Cellulose Products Ltd. Vs. CCE -2006 (205) ELT 750 Cash Discount ....
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....have not collected excise duty from the dealer on these PDI/FSC. He submits that the transaction value of the vehicle is at the price on which the vehicles are cleared at the time and place of removal which is their factory gate. He relied on the decision of the Tribunal in their own case vide Final Order No. 25567 to 25569/2013 dated 8.7.2013 and submits that the Tribunal after considering the Hon'ble High Court's order in the case of TATA Motors Vs. Union of India - 2012 (286) ELT 161 (Bom.) allowed their appeal. The manner of finalization of provisional assessment:- 9. He drew attention to Order-in-Original where the adjudicating authority while finalizing the provisional assessment for each transaction and the Annexure to the Order-in-Original Volume - I Pages 1413 where he computed for each issue incurred, claimed and denied and arrived at the net for each discount. At the end of the working he has calculated individually the short paid value and excess paid value for each transaction and demanded duty on the short paid value and whatever the portion where he has allowed the discounts. He failed to adjust the amount instead passed the order and directed the assessee to c....
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....ocedure as per the Board circular and the lower appellate authority has rightly allowed the trade discount. 12. The learned AR for Revenue submitted his arguments for the Revenue Appeal Nos. E/472 to 477/2009. On section 3(4) of TNGST deduction, he drew attention to statement of facts at paragraphs 5, 6, 7 at page 4 of Revenue appeal and reiterated the grounds of appeal (iii), (iv), (v) and (vi) of Ground - I. He submits that the original authority has rightly disallowed and drew attention to Order-in-Original No. 21/2007 dated 27.9.2007 from pages 46 to 48 of the Revenue appeal. What is to be allowed is deduction only on sales tax paid on the finished goods whereas in the present case, the goods are transferred on stock transfer basis. There is no sale involved. He submits that the Commissioner (Appeals) has not discussed the findings of the adjudicating authority and also relied on the decision of the Tribunal in the case of CCE, Calcutta Vs. Khaitan Fans (P) Ltd. - 1986 (26) ELT 321. 13. On the second issue, i.e. trade discount, he reiterated the grounds of appeal - II and submits that the adjudicating authority has rightly disallowed the abatement of trade discount as dis....
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....h credit notes to the dealers for the period post 1.7.2000. (iv) The order in appeal is silent about the manner in which the provisional assessment is to be finalized and the manner in which the assessment value is to be determined when abatements are allowed. 20. On the other hand, the revenue has filed appeal against the findings of the Commissioner (Appeals) in the impugned order in appeal on the following issues: (i) The Commissioner (Appeals) should not have allowed on the abatement of tax paid under the provisions of section 3(4) of the TNGST Act as the said tax paid is not a sales tax on the final product. (ii) The Commissioner (Appeals) should have disallowed the abatement of trade discount as the same were not disclosed to the dealers at the time of prior to removal of goods. 21. The above grounds for appeal by both the sides are dealt with and the findings are given as below: APPELLANT / ASSESSEE GROUNDS: The Commissioner (Appeals) has disallowed the abatement of freight from the assessable value on the ground that for the period up to 28.2.2003 the said element of freight should have been shown separately in invoices. He....
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....freight element has not been shown separately in the invoices. Appellants are eligible for deduction of equalized freight. 1. Denial of cash discount on the ground that the same is not passed on to all the dealers. Regarding this ground of the assessee/appellant, we find that the said cash discount is granted in the invoices themselves and irrespective of whether the buyer claims the same or is eligible for the same, the said discount is claimed as deduction from the price. The transaction value under section 4 of the Act refers to price paid or payable for the goods removed. It is not the case of the department that whomsoever is not eligible for the discount is asked to pay back the same by the appellant through debit notes. In other words, once the cash discount is allowed in the invoices, irrespective of the eligibility to the said discount, if any, of the buyer, same is passed on in the invoice itself. Therefore, the valuation provision read with the rules would not envisage rejection of such discounts when the same is not recovered later by the Manufacturer. The buyer based on the net price charged in the invoices, pays the amount to the Manufacturer and that becomes th....
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....ble in view of the Supreme Court decision in the appellant's own case cited above. This bench in the case of M/s. Hyundai Motors (I) Ltd. Vs. LTU, Chennai in Final Order No. 41614 - 41623/2015 dated 01.12.2015, have already allowed PDI & FSI, by relying the Hon'ble Bombay High Court Order in the case of Tata Motors. So the Hon'ble Apex Court in the appellant's own case has upheld the Hon'ble High Court's order. Accordingly, we hold that the appellants are eligible for deduction of these charges. (a) We find that the appellant had resorted to provisional assessment at the time of clearance of the goods to the dealers and claimed abatement of the said charges and did not pay duty on the same. Therefore, when no duty was paid, initially in view of the provisional assessment, the question of issuing credit notes, including the duty amount on such charges, never arose. The Commissioner (Appeals) has not applied the facts of the case to the issue in question. For the reasons cited above, we do not accept the Commissioner's findings on the said issue. 3. Plea regarding proper finalization of provisional assessment based upon proper computation of assessable value, taking in....
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....der sub-section (3), tax at one per cent on the value of the goods so purchased." The liability to pay this tax on the value of input purchased arises only in the event of transfer of final products outside Tamil Nadu, i.e., on stock transfer. This tax is nothing but a levy on the finished excisable goods cleared from the factory and therefore excludable from value in t terms of Section 4. The event of taxation is the sale of manufactured final products. The appellant paid the tax as a seller of goods, of course, on the purchase value of inputs. Besides, it is a levy on sale of goods. The abatement for this Tax allowed in the impugned order is correct and therefore, the appeal filed by the department merits dismissal. 2. Abatement of Trade Discounts We find that the Commissioner (Appeals) in the impugned Order in Appeal, have allowed abatement of discount on the ground that all the factors propounded by the Supreme Court in various decisions have been satisfied by the appellant manufacturer and he has held that the rejection of the abatement of such discounts on the ground that they were not made known prior to the removal of goods is not correct. We also find that the Com....