2006 (6) TMI 412 - AT - Central Excise

Summary

Issues:
Challenge to exclusion of turnover tax and entry tax from transaction value under Section 4(3)(d) of the Central Excise Act, 1944.

Analysis:
The appeal was filed against the Commissioner of Central Excise's order rejecting the exclusion of turnover tax and entry tax from the transaction value. The appellants cited Notification No. SO-431 dated 29-3-2001 exempting dealers of petrol and diesel from turnover tax on the condition that a specific turnover tax percentage was paid by the Oil Companies. A communication from the Commissioner of Commercial Taxes clarified that dealers of certain commodities were not eligible for exemption under the composition scheme for turnover tax. The Rajasthan Apex Board confirmed that the appellants had complied with the conditions for tax exemption, and the tax exemption was not contingent on oil companies paying turnover tax on behalf of dealers. The Commissioner's decision to assess additional turnover tax was deemed erroneous.

Regarding the entry tax, the appellants argued that they had paid the tax at the time of sale, even though it was not deducted at the time of goods' removal. The Tribunal observed that the appellants had paid the tax as required by law and originally demanded by tax authorities. The Tribunal concluded that these payments should not be considered as mere deposits at that stage. The Tribunal found no fault in the entry tax payment timing and granted an interim stay on the demand of duty and penalty without requiring any deposit during the appeal's pendency.

In conclusion, the Tribunal allowed the appeal, directing a waiver of the demand of duty and penalty. An interim stay was granted without the necessity of any deposit during the appeal process. The application was disposed of accordingly on 28-6-06.