AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 533
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....ana General Sales Tax Rules, 1975 and Rule 69 of Haryana Value Added Tax Rules, 2003. In terms of said Certificate, the appellants were granted Sales Tax deferment not exceeding Rs. 214.93 crores. Under the deferment scheme, 50% of the total Sales Tax payable to the State Government is to be retained by the appellants and they need not play this amount to the Sales Tax Department in future. Proceeding s were initiated to demand and recover differential Central Excise Duty on that portion of Sales Tax collected from the customers and retained by the party by adding the same in the transaction value for Central Excise purpose. Duty to an extent of Rs. 11,90,61,237/- was demanded along with the proposal for penalties. The case was adjudicated resulting in the present impugned order. The learned commissioner confirmed the demanded amount and imposed a penalty of equivalent amount of the appellants. Aggrieved by this, the appellants are before us. 2. The learned counsel for the appellants contested the impugned order mainly on the ground that the appellants are eligible for full education of Sales Tax payable by th....
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....ery clear to the effect that the exclusion of Sales Tax is to be on the basis of the actual paid amount. There is no ambiguity in the terms of the statutory provision as explained. The actual payment of Sales Tax is known and the same is eligible for deduction. The exemption granted by the State Sales Tax authorities by way of 50% of Sales Tax, which is actually collected by the appellants and retained by him, cannot be treated as Sales Tax al all. This is nothing but an additional consideration accruing to the appellants during the course of sale of excisable goods. He also submitted that the board's circular, relied upon by the appellants, is not appropriate as the Explanation has been inserted is Section 4 in 2003. He also submitted that deeming fiction created in the State Sales Tax Rules cannot be applied to Central Excise Act where such fiction has not been recognized specifically. He also supported the demand for extended period and imposition of penalty on the appellants stating that both were done in terms of the provisions of Section 11a and 11AC of the Act. 4. We have haear both sides and examined the appeal records carefully. 5. The main point of dispute i....
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....e appellants by the State Sales Tax authorities is by way of an exemption. The said exemption was converted into the scheme of deferring payment of tax upon introduction of Haryana Value Added Tax Act, 2003. In fact, it is apparent that we are dealing with an exemption scheme where the mode of payment has been modified by the Act of 2003. This is relevant in view of the reliance placed by the appellants on the decision of the Tribunal In Uttam Galva Steels Ltd. (supra). There the Tribunal was dealing with a scheme under Maharashtra Value Added Tax Act, 2002, Section 94 of the said Act provides for deferred payment of Sales Tax. No reference has been made to any exemption of Sales Tax in the said provision. One of the points considered by the Tribunal in Uttam Galva Steels Ltd. (supra) is that, as per the incentive scheme of the Maharashtra Government there is no 'exemption' from payment of Sales Tax, whereas in the present case we find that the exemption scheme of 1973 Act is continued in 2003 Act by the Haryana Government. 7. As correctly noted by the original authority, the implication of deeming provision in a VAT enactment for the purpose of Central Excise valuation has to be ....
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....o be excluded for arriving at the "transaction value". That is not the factual matrix in the present case. The assessee in the present case has paid only 25% and retained 75% of the amount which was collected as sales tax. 75% of the amount collected was retained and became the profit or the effective cost paid to the assessee by the purchaser. The amount payable as sales tax was only 25% of the normal sales tax. Purpose and objective in defining "transaction value" or value in relation to excisable goods is obvious. The price or cost paid to the manufacturer constitutes the assessable value on which excise duty is payable. It is also obvious that the excise duty payable has to be excluded while calculating transaction value for levy of excise duty. Sales tax or VAT or turnover tax is payable or paid to the State Government on the transaction, which is regarded as sale, i.e., for transfer of title in the manufactured goods. The amount paid or payable to the State Government towards sales tax, VAT, etc. is excluded because it is not an amount paid to the manufacturer towards the price, but an amount paid or payable to the State Government for the sale transaction, i.e., transfer of ....
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....ed as only amounts payable to the State Government as Sales Tax can be deducted. We find that the Hon'ble Supreme Court again reiterated that the Sales Tax actually paid or payable to the State Government is only eligible for deduction. In the present case, admittedly, the Sales Tax/VAT payable/paid to the Haryana State Government is only 50% which was eligible for education. The remaining amount is legally allowed to be retained by the appellants and is not payable to the State exchequer. In such scenario, we find that the impugned order is correct in upholding the inclusion of that portion of Sales Tax/VAT in the assessable value collected by the appellants but not paid or payable to the State Government. The ratio followed is in conformity with the findings of the Hon'ble Supreme Court, as discussed above. The Hon'ble Supreme Court in CCE vs National Engg. Industries, 2015 (320) ELT 27 (SC), again held that post 01.07.2000 in arriving 'transaction value' Sales Tax benefit which as retained by the assessee, would be included while fixing the 'transaction value'. 10. We find while the case on merit is against the appellants, their plea of time bar of that portion of demand beyond....