TaxTMI 
TaxTMI 
2017 (11) TMI 90
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....the total amount of duty paid is required to be deducted from the sale value of goods and (ii) whether freight outward is not to be deducted from the sale Value since as per explanation given in Para 6 (5) of Notification, only excise duty, value Added Tax and other indirect taxes are required to be excluded. 2. On the issue No.1, the Revenue felt that for the purpose of calculation of gross value of sale, total duty actually paid by the manufacturer should be deducted and not the duty paid minus the refund which accrued to them. On the issue No.2, the Revenue felt that outward freight will not form part of the sale value. 3. The matter was adjudicated after following due process and the Commissioner held against the appellant on both the issues. Aggrieved from the said order of the Commissioner, the appellant has filed this appeal. 4. Learned Advocate for the appellant submits that the appellant applied for fixing special rate since the value addition in their case was more than 115% of the rate specified in Notification No.1/10. He took us through the provisions of above notification and contended that only actual excise duty paid is required to be deducted and not the p....
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.... Vs. CCE & ST., J&K 2015 (328) ELT 625 (Tri. Del.). 2. CCE Shillong Vs. India Carbon Ltd. 2011 (269) ELT 6 (SC) 7. Heard the rival submissions and perused the records. 8. There are two issues arising in this appeal, which are enumerated in the opening paragraph. We find that on the first issue of whether the excise duty for the purpose of calculation of sale value which Notification No.1/2010-CE dated 6.2.2010 should include the excise duty paid through PLA, which is refunded to the assessee, the Commissioner has taken the view that the notification uses the word actual value addition and that refund which is granted by the Government is an incentive and not value addition, which a manufacturer achieves. Hence, the refunded amount of excise duty cannot be deducted to arrive at the actual value addition. The manufacturer is only acting as an agent of the Central Government when he collects the duty of excise from the buyers and remits to the Government. Hence, he has argued that the refund under the notification cannot be considered a part of value addition. He has also referred to an income tax case in which it was held that the excise duty should be treated as capit....
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....tion notification. The refunded amount is the portion which is exempted. We also find that had there been plain exemption, then this problem would not have been arisen. 10. We also note that the term used in the Explanation to the paragraph 6 (5) of the notification is excise duty whereas the terms used in paragraph 4 (a) and 7(1) is the total duty paid . Hence, it is not correct to conclude that both the terms are identical. In para 7(1) the wording and context make it evident that the total duty paid means the total excise duty paid through PLA i.e. other than the amount paid through Cenvat Credit. 11. We find force in the contention of the Ld. Advocate that Notification no.1/2010-CE provides for partial exemption. It is also evident from the Board s Circular No. 682/73/2002-CX, dated 19.12.2002, which was issued when Notification No.56/2002-CE dated 14.11.2002, for area based notification in J&K was initially issued. Para 3 of the said Circular is relevant in this regard and is reproduced below: "3. In this context, it may be pointed out that the Refund envisaged in the notifications is not on account of any excess payment of excise duty by the manufacturers, but ....
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....& ST., J&K (supra) relied upon by the Revenue, the question of whether net excise duty would be considered for computing sales value has not been addressed. It is mentioned that special rate of value addition has to be calculated on the basis of formula prescribed in the explanation. The other question dealt is on raw material and packing material. Hence, it does not help the Revenue. 14. We also note that while examining the inclusion of VAT in the transaction value of the goods the Hon ble Supreme Court in the case of CCE vs. Super Syncotex (India) Ltd.-2014 (301) ELT 273 (SC) held that when the tax is actually paid to the Sales Tax Department, no benefit regarding excise duty can be given under the concept of transaction value. If it was not payable or to be paid as Sales Tax/Vat cannot be charged from the buyers and if charged but not paid or payable become parts and parcel of transaction value. 15. In view of foregoing, on the same analogy, we hold that when an amount of duty is refunded to the assessee, under Notification No.1/2002-CE, the same has to be deducted from the excise duty paid by the appellant while arriving at actual value addition. 16. On the issue of f....