TaxTMI 
TaxTMI 
2016 (7) TMI 1203
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.... and other taxes, if any, paid on such goods. Upon scrutiny of records maintained by the appellant, the officers found that while arriving at the 10% amount, the appellants have deducted the said amount from the price and calculated the amount payable on such cum-duty basis. Taking a view that method adopted by the appellant to calculate the 10% amount payable in terms of Rule 6(3) has been wrongly arrived at resulting in short payment, proceedings were initiated against the appellant which resulted in order in original confirming the demand of Rs. 44,94,723/- and imposing penalty of Rs. 11,25,000/- 2. On appeal, the Commissioner (Appeals) upheld the demand for the normal period (Nov, 2005 to December, 2005) and set aside the penalty. Aggrieved by this, the appellant is before us. 3. We have heard both sides and perused the appeal records. 4. The learned Counsel appearing on behalf of the appellant submitted that the present demand relates to differential amount for the period November, 2005 to December, 2005 only. Substantial portion of the demand has been held to be time barred in the impugned order. The demand originally c....
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....;s decision in the case of Mahindra & Mahindra Ltd. vs. CCE Mumbai [2007 (211) ELT481 (Tri-Mum)]. In the said case, the Tribunal held that 10% amount payable under Rule 6(3) is neither in the nature of money raised for Government nor a tax deduction and as such, not leviable for exclusion from the price for arriving at the amount to be paid. 6. It is seen that the Tribunal in the appellants own case vide Final Order No. 509998-50999/2016 dated 10.3.2016 held that reversal of 10% amount on the value of exempted goods as a statutory requirement and when the assessee collected the same from the buyer, the same cannot be included while arriving at the value for calculating that 10%. The Tribunal relied on the ratio laid down by Hon'ble Supreme Court in the case of CCE vs. Kisan Sahakari Chini Mills Ltd. [2001 (132) ELT 523(SC)]. The Hon'ble Supreme court examined the scope of term "other taxes" for exclusion from the assessable value. It was held that "taxes" as such are not defined in the Central Excise Act. If the expression "taxes" is to be understood in the absence of any definition, it would certainly cover any levy. It was held that any compulsory exa....
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....t Credit Rules, the said 10% is required to be considered as "other tax" and as such, the price at which 10% is required to be paid, should be arrived at after deducting the said amount. 11 . A reading of the entire provisions of Rule 6, shows that an assessee is not entitled to avail Cenvat credit of duty in respect of the inputs which stand used in the manufacture of exempted goods. However, wherever the assessee is manufacturing dutiable as also exempted final product, he is under a legal obligation to maintain separate accounts of the inputs being used in the manufacture of dutiable final products as also the exempted final product. It is only in the circumstances where he is unable to maintain separate accounts or opts not to maintain separate accounts, he is liable to pay a particular specified amount of total price of the exempted final product. Admittedly in terms of the said Rules, the total price of the exempted goods, which is required to be adopted for the purpose of payment of such specified amount would exclude sales tax and 'other tax', if any. A question which arises is as to what is meaning of the "other tax" as appearing in the said Rule and whether ....
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....clude that said reversal is primarily and basically for neutralizing the cenvat credit which the assessee has taken and which was not available to him right from the beginning. 13. The question which arises is as to whether such reversal can be said to be covered by the expression "other tax" appearing in Rule 6(3)(b) so as to exclude the same from the price of exempted final product. My learned brother has followed the earlier order passed in the same assessee' case (where he was one of the member) wherein it was held that the said payment is compulsory exaction made in an enactment and as such, held to be as a duty or impost which is in the nature of 'tax'. For holding so, the Bench has followed the Hon'ble Supreme Court decision in the case of CCE vs. Kisan Sahakari Chini Mills Ltd. [2001 (132) ELT 523(SC)] as also the Supreme Court decision in the case of Chhata Sugar Co. Ltd. [2004 (3) SCC 466] . 14. I have examined the said decisions of the Hon'ble Supreme Court. In the case of CCE vs. Kisan Sahakari Chini Mills Ltd., the issue before the Hon'ble Supreme Court was as to whether the administrative charges collected by the State Government under....
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....ministrative charges is in addition to the price at which goods are sold in the ordinary course of business by the sugar factory. The pre-dominant object of the U P Act is to maximise the revenue by way of tax while regulating the storage and supply of molasses. The beneficiary under the said Act is the distillery and it is the distillery which provides important source of revenue to the State. It was in these circumstances, the Hon'ble Supreme Court held the levy of the administrative charges is in the nature of tax. In the present case, by reversing a particular amount, the manufacturer is primarily and basically reversing the credit which in any case, was not available to him and having availed the same, he is made to reverse it by paying the particular percentage of the value of the final product. As such, in my views, the said reversal of credit by debiting the cenvat credit account by the specified amount in terms of Rule 6(3)(b) cannot be considered to be a 'tax' so as to claim its deduction. The tax is always imposed with the exercise of legislative competency conferred upon the said legislature and it has to be born in mind that the assessee is absolutely and l....