2004 (2) TMI 511 - AT - Central Excise

Summary

Issues:
Whether the amount of Sales Tax payable at an effective rate, ignoring set-off available in respect of inputs, is eligible for deduction from the cum duty price of excisable goods for determining the assessable value under Section 4 of the Central Excise Act.

Analysis:
The common issue in these appeals is the eligibility of deducting the entire sales tax payable, ignoring the set-off available under the Sales Tax Act, for determining the assessable value under Section 4 of the Central Excise Act. The appellants argued that they are entitled to deduct the full sales tax payable, contrary to the assessing authority's view that eligibility is limited to the actual amount deposited with the State Government. The appellants relied on various decisions and circulars to support their contention, while the Departmental Representative supported the impugned orders by referring to a specific decision. Upon examining the facts and precedents, the Tribunal found that the decisions relied upon by the appellants were applicable in this case. It was noted that in a previous case, where there was total exemption from sales tax at a certain stage, a circular had no application, but in the present cases, the circular directly applied. The Tribunal referred to a circular stating that the set-off scheme of sales tax should not be taken into account for calculating the amount of sales tax permissible as abatement for determining the assessable value. Consequently, the Tribunal set aside the impugned orders and allowed the appeals.

This judgment clarifies the issue of whether the amount of Sales Tax payable, without considering set-off available for inputs, can be deducted from the cum duty price of excisable goods for determining the assessable value under the Central Excise Act. The Tribunal relied on previous decisions and circulars to support the appellants' argument that the entire sales tax payable should be deductible, contrary to the assessing authority's view. By analyzing the facts and relevant legal provisions, the Tribunal concluded that the circular directly applied to the present cases, allowing the deduction of the full sales tax payable. This decision provides clarity on the treatment of sales tax for determining the assessable value under the Central Excise Act, ensuring consistency in such calculations.