TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 315
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....er Notification No.1/2010-CE dared 6.2.2010. The appellant is engaged in the manufacture of staple strips falling under Chapter 83 of the Central Excise Tariff. As per Sl.No.19 of the Table in para 2 of the said notification, the value addition has been fixed at 36% for the above mentioned goods. Notification provides for fixation of special rate of value addition under certain situations. During the examination of the claim of the appellant for fixing the special rate, the dispute arose on two issues viz. (i) whether net excise duty paid and not 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 Pa....
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....uty 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 capital receipt. He has also argued that if the term payment of duty is taken as duty paid minus refund then para 7(1) would lead to illogical conclusion. We are unable to agree with the above views of the Commissioner for more than one reason. From the wording of the notification, it is evident that the objective is to ....
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....1) of Section 5A of Central Excise Act, 1944. If the intent is to ascertain actual value addition, then this artificial mechanism of paying duty and subsequent refund, which is merely a mechanism to implement the exemption notification will required to be kept out of calculation. The Commissioner has clearly fallen into an error when he claims that refund is the exemption notification is an incentive and not value addition. We note that refund is not due to any excess duty paid but an extraordinary mechanism to implement the exemption 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 ....
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.... Satyapal Ltd. vs. CCE-2016 (340) ELT 376 (Tri.-Kolkata) took the view that portion of excise duty which is refunded to the appellant under Notification NO.32/95- CE is the duty which is considered as exempt. This Tribunal has held as below: "4.2 A plain reading of the above Rules reveals that area based exemptions 32/99-C.E. & 33/99-C.E., both dated 8-7- 1999, are mentioned along with other area based exemptions. Some of the exemption notifications specified in these Rules are issued much after Notification No. 27/2001-C.E., dated-11-5-2001. The exclusion of Notification No. 27/2001-C.E. from Rule 12 of CCR, 2004 is thus deliberate. Further Notification No. 27/2001-C.E. is an independent exemption Notification and not an amendment to Not....
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.... 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 a....