TaxTMI 
TaxTMI 
2024 (12) TMI 1680
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....4- COM-05/15-16 dated 25.06.2015 (referred to, as 'the impugned order') passed by the Commissioner of Central Excise, Pune-IV Commissionerate, Pune. 2. Revenue has filed these miscellaneous applications seeking for change of name and address of the respondent arising on account of change in territorial jurisdiction of the Central Excise authorities after introduction of GST regime vide Notification No.13/2017-C.E. (N.T) dated 09.06.2017 and as the appellants-assessee presently comes under their jurisdiction. As the revised name and address of the respondent Commissionerate correctly reflect the revised jurisdictional departmental authorities, under whose jurisdiction the appellants-assessee is functioning for the purpose of indirect taxes viz., Central Excise/GST, the miscellaneous applications filed by the Revenue is allowed. The prayer made by the Revenue is considered and the revised name and address of the respondent is duly incorporated for the purpose of disposal of the appeals. Registry is directed to incorporate the following changed name and address of the respondent in the appeal records for the purpose office records. "Commissioner, Central Goods and Services....
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....3. According to the said PSI scheme, eligible assessee can collect Sales tax/VAT/CST from its purchasers and pay the same to the Government of Maharashtra on the expiry of a deferred period. The appellants were one of the eligible units and granted the benefits of PSI vide Certificate No. DI/PSI/1993/Deferral/ EC-4733 dated 13.09.2007 for a period of fourteen years. Under the said scheme, the eligible unit was permitted to charge sales tax for the sale of the goods and the amount of sales tax so collected was permitted to be retained by the appellants, subject to such sales tax amount should be paid in five equal yearly instalments on expiry of the deferment period, as computed from the last date of filing sales tax return. 3.4 Subsequently, in December 2002, the Sales Tax Department of the Government of Maharashtra introduced a Scheme for pre-mature repayment of deferred sales tax at Net Present Value (NPV) as per proviso to Section 38( ) all the Bombay Sales Tax Act, 1959/ Section 94(2) of the Maharashtra Value Added Tax, 2002 (MVAT). Under such provision, where the sales tax liability is paid by way of pre-mature payment as per NPV, then it would be deemed as if the full Sale....
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....entral Excise, Pune-III, in this regard were adjudicated vide the common order dated 25.06.2015, wherein total Central Excise duty demand of Rs.350,62,41,004/- under Section 11A of the Central Excise Act, 1994 by invoking extended period was confirmed along with interest payable under Section 11AA ibid. Further, the excisable goods involved in contravention of the legal provisions were confiscated and redemption fine in lieu of confiscation of 20% on the value of goods i.e. Rs. 37,55,57,57,772/- on the appellant company under Rule 25 of the Central Excise Rules, 2002 and imposed penalty of Rs.50,00,000/- on Shri C. Ramakrishnan and Rs.40,00,000/- on Shri Ackash Mital, other appellants who are the employees appellant company. Feeling aggrieved with the impugned order, the appellants have preferred these appeals before the Tribunal. 4.1 Learned Senior Advocate appearing for the appellants submitted that as per Section 4(1)(a) of the Central Excise Act, 1944, the assessable value of the excisable goods for payment of Excise duty shall be the 'transaction value', where the goods are sold by the assessee for delivery at the time and place of removal, where the assessee and the buyer ....
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....Tri.-Mumbai) (ii) Hardoli Paper Mills Limited Vs. Commissioner of Central Excise, Nagpur - 2024 (5) TMI 1128 - CESTAT Mumbai (iii) Gabriel India Limited Vs. Commissioner of Central Excise, Pune-IV - Final Order No. A/85661/2024 dated 02.07.2024 (iv) SKG Refractories Limited Vs. Commissioner of Central Excise, Nagpur-I - Final Order No. A/85662/2024 dated 02.07.2024 (v) Rational Engineers Private Limited Vs. Commissioner of Central Excise, Thane-I - 2023 (11) TMI 363 - CESTAT Mumbai (vi) Commissioner of Central Excise, Mumbai-I Vs. Welspun Corporation Limited - 2017 (358) E.L.T. 630 (Tri.-Mumbai) (vii) Honda Motorcycle and Scooters India Pvt. Limited Vs. Commissioner of CGST, Customs & Central Excise, Alwar - 2020 (374) E.L.T. 941 (Tri.- Del) (viii) Commissioner of Central Excise, Bangalore Vs. Mazagon Dock Limited - 2005 (187) E.L.T. 3 (S.C.) 4.3 Learned Senior Advocate submitted in respect of demands confirmed with respect to Take or Pay (TOP) charges that these charges pertain to assurances for specified quantum of clearances to be made by the appellants to Tata Motors Limited (TML) alone; in case of failure to mee....
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....C, as follows: (i) Spring Fresh Drinks Vs. Collector of Central Excise - 1991 (54) E.L.T. 333 (Tribunal) affirmed by Hon'ble Supreme Court in 1997 (92) E.L.T. A70 (S.C.) (ii) Commissioner of Central Excise, Belgaum Vs. Praxair India Limited - 2008 (223) E.L.T. 596 (Tri. -Chennai) (iii) Jindal Praxair Oxygen Co. Ltd. Vs. Commissioner of Central Excise, Belgaum - 2007 (208) E.L.T. 181 (Tri. - Bang.) (iv) Inox Air Products Ltd. Vs. Commissioner of Central Excise, Nagpur & Mumbai-I - 2001 (134) E.L.T. 224 (Tri. - Mumbai) (v) Skoda Auto Volkswagen India Pvt. Ltd. Vs. Commissioner of Central Excise, Aurangabad - (2023) 5 CENTAX 54 (Tri. - Bom.) (vi) Star Glass Works Vs. Commissioner of Central Excise, Mumbai - 2003 (162) E.L.T. 367 (Tri. - Mumbai) affirmed by hon'ble Supreme Court reported in 2004 (163) E.L.T. A46 (S.C.) (vii) CBIC Circular No. 178/10/2022-GST dated 03.08.2022 (viii) Pushpam Pharmaceuticals Co. Vs. Collector of Central Excise, Bombay - 1995 (78) E.L.T. 401 (S.C.) 5. On the other hand, learned Special Counsel submitted that the Appellants had collected full amount of sales tax/VAT from their buyers....
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....iod covered by a return alongwith the amount of penalty or interest or both] payable by him under section 36. (3) A Registered dealer furnishing a revised return in accordance with sub-section (3) of section 32, which revised return shows that a larges amount of tax than already paid is payable, shall first pay into a Government treasury the extra amount of tax. (4) The amount of tax- (5) due where returns have been furnished without full payment thereof, or (6) assessed or reassessed for any period under section 33 or section 35 less any sum already paid by the dealer in respect of such period, or (7) assessed under sub-section (3) of section 41, and (8) the amount of penalty or interest or both (if any) levied under section 36 or 37, and (9) the sum (if any) forfeited to the State Government under section 37, and, (10) the amount of fine (if any) imposed under sub-section (3) of section 53 and (11) any other dues under this Act, shall be paid by the dealer or the person liable therefor into a Government treasury within thirty days from the date of service of the notice issued by the Commissi....
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....ll be deemed to have been paid." 8.2 On perusal of the above legal provisions, it transpires that sales tax amount payable under the Sales Tax Incentive schemes of PIS/NPV is nothing but Net Present Value of the sales tax amounts payable in future based on the discounting factor of rupee value. The proviso clause also specifically state that the amount paid at NPV is equal to the full amount payable in future date, that the entire sales tax liability is deemed to have been discharged. Therefore, the differential amount arising on account of payment of sales tax liability as per NPV and total sales tax amount, had it been payable after the deferment period, shall not be treated as additional consideration. Hence, such amounts cannot be include in the transaction value in terms of Rule 6 of the Central Excise (Valuation) Rules, 2000. 8.3 We further find that the issue arising out of the present dispute is no more res integra, in view of the judgements relied upon by the appellants in various cases stated in paragraph 4.2 above. The issue decided in those cases was that incentives/subsidy of VAT/Sales Tax refunded by the State Government at a percentage of the tax paid by the as....
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....ctually payable is to be determined at the time of removal. Thus the amount actually paid cannot be determined at some other time. In any case, in the present case, the amount payable has not been varied by the Sales Tax Authorities. Under the facts of the present cases, in our view, the Explanation may not be of any help to the Revenue as at the time of clearance, the term 'actually payable' was relevant and not 'actually paid'. Further, the amount of actually payable sales tax has not been varied by the Sales Tax Authorities. In view of the said factual matrix in the present cases, in our considered view, the Explanation does not help the cause of the Revenue and the contention is therefore rejected." Welspun Corporation Ltd. (supra) "5.10 Thus in our view, once the Sales Tax Department has assessed the Sales Tax as paid, the Central Excise Department cannot contend that since the State Government has remitted the amount back to the appellants as incentive, Sales Tax was not paid by them. Hence, we find that once the Sales Tax Department assessed the Sales Tax as paid, the condition of Section 4(3)(d) of the Central Excise Act, 1944 stands fulfilled. 5.11 We ....
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....he subsidy was as per the policy of the Government. The subsidy of 20% was paid by the Government, 10% was paid by the buyer. In our view the subsidy of 20% from the Government cannot be said to be additional consideration as it is not received from the buyer either directly or indirectly. Therefore, that would not be includable in the price of the goods for the purposes of excise. However, it is an admitted position that 10% subsidy was received by the Respondent from the buyer. It is therefore additional consideration received by the Respondent from the buyer. The fact that it is received under a policy of the Government does not detract from the above position. It is therefore includable. The judgment of the Tribunal holding that the entire subsidy (including the 10%) is not includable, is not correct and is set aside." Honda Motorcycle and Scooters India Pvt. Ltd. "11. Though Department has given much emphasis upon Super Synotex (supra) [2014 (301) E.L.T. 273 (S.C.)] but we are of the opinion that the facts of present case are absolutely different from the said case in the terms that the Hon'ble Apex Court in the said case was dealing with sales tax incentive scheme....
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....s held in these cases that TOP/ Minimum TOP charges cannot be added to the assessable value by treating them as additional consideration. The relevant paragraph(s) of the above referred case laws are extracted and given below: Spring Fresh Drinks (supra) "15. The next contention of Shri Sridharan is that the "Collector treated the liquidated damages recovered by the appellants for non-performance of the contract by the dealers as quality discount." In other words the appellants are collecting from the buyers i.e. customers the notional cost for not lifting the contracted quantity of the aerated water. It is actually compensation for non-performance of the entire contract. This is an income or profit for the manufacturer, but not the price for the manufacture of aerated water. It is not the case of the department that the price of the aerated water is depressed by making a provision for compensation for short lifting the contracted quantity. In the absence of such evidence the profit earned or income cannot be added to the assessable value. In this context we may refer to the observations of the Supreme Court in CCE v. Indian Oxygen [1988 (36) E.L.T. page 730 (SC)] which....
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....ly makes a statement that it is an additional consideration. The appellants have produced a number of case-laws to show that the MTOP charges cannot be added to the assessable value treating them as additional consideration. These case laws are very relevant for the present case. The Commissioner, in the impugned order, has not at all discussed the case-laws cited by the appellants. (i) The CEGAT, in the case of CCE v. Bhagwati Oxygen Ltd (cited supra), has clearly held that compensations were payable when goods were not supplied cannot be included in the assessable value of earlier supplies. The MTOP charges are paid by the JVSL to the appellant when they fail to take the minimum quantity assured by them. It does not stand to common sense that these charges form an additional consideration especially when no goods are supplied. The additional consideration is always in relation to the goods supplied. (ii) The CEGAT, in the case of CCE v. Hawk Engines (cited supra), has held that the compensation for non-performance paid to the assessee by the principals has no relationship with the assessable value or price of goods manufactured by assessee and, therefore, the sa....
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....ectricity consumed. 10.1 The fact that the minimum fixed charges remain the same whether electricity is consumed or not or it is scheduled/consumed below the contracted or available capacity or a minimum threshold, does not mean that minimum fixed charge or part of it is a charge for tolerating the act of not scheduling or consuming the minimum the contracted or available capacity or a minimum threshold." 8.5 On careful perusal of factual matrix of the case, it transpires that the Sales Tax Incentives received by the appellants under PSI/NPV scheme were in terms of the policy pronouncements, operation of the scheme as notified by the Government of Maharashtra; and the amount of sales tax incentives were duly accounted for and distributed among the JV partners, as per the agreements entered into between them. Further, the arrangement of assured minimum take over or pay also has been stated very clearly in the agreements entered into and these amounts have also been duly accounted in the books of accounts by the appellants. Furthermore, the appellants have also been filing periodical returns before the jurisdictional Central Excise authorities indicating therein all the d....
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....sh under the Industrial Promotion Policy, 2010 would be includable in the transaction value under section 4 of the Central Excise Act, 1944 by treating the same as an additional consideration flowing directly or indirectly from the buyers to the assessee, in a case where: (a) 100% of the sales tax payable, was paid by the appellant to Commercial Tax Department of the State Government and an amount equivalent to 75% of such sales tax paid was remitted as subsidy by the Industrial Department of State Government to the Commercial Department for adjusting against the Tax liability of the subsequent year, on behalf of the appellant; and (b) Sale tax actually paid or actually payable was specifically excluded from the transaction value in terms of section 4(3)(d) of Central Excise Act. xxx xxx xxx xxx ....... 31. To revert, what has to be examined is whether in a case where the assessee collects Rs. 2500/-towards sales tax and adjusts the sales tax liability of Rs. 1000/- from VAT 37B challan issued by the State Government as subsidy under the promotion policy and deposits the remaining amount of Rs. 1500/- towards sales tax in cash through VAT 37A ....