2014 (10) TMI 190 - AT - Central Excise

Valuation - Abatement of equalized/averaged sales tax - Whether the appellants are eligible for abatement of equalized / averaged sales tax from transaction value under Section 4 of the Central Excise Act - Held that - There is no dispute about the eligibility for deduction on account of octroi and additional sales tax. The original authority has accepted this in principle. He has disallowed the deduction only based on the grounds that the Respondent have claimed the same on a weighted average basis as mentioned earlier. The Commissioner (Appeals) have allowed the deduction without specifically giving a finding on each of the above three grounds raised by the original authority. We are of the considered view that in the given facts and circumstances of the case, the deduction towards additional sales tax and octroi can be allowed on equalised basis - Following decision of assessee s own previous case - appellants are entitled to claim the abatement of equalized sales tax from the transaction value - Decided in favour of assessee.

Summary

Issues Involved:
Appellants' eligibility for abatement of equalized/averaged sales tax from transaction value under Section 4 of the Central Excise Act.

Detailed Analysis:

Issue 1: Eligibility for abatement of equalized/averaged sales tax
The judgment dealt with the issue of whether the appellants are eligible for abatement of equalized/averaged sales tax from the transaction value under Section 4 of the Central Excise Act. The Revenue contended that the appellants should claim sales tax abatement on an actual basis. However, the Tribunal, in the appellant's own case, held that such deduction is permissible. The Tribunal referred to various previous decisions, including one in the case of Zandu Pharmaceuticals Vs CCE Thane-II, where it was held that equalized sales tax can be allowed to be deducted. The Tribunal further reiterated its stance in subsequent orders, emphasizing that the deduction towards additional sales tax and octroi can be allowed on an equalized basis, provided the expenses are segregated exclusively for excisable goods cleared by the appellants for the respective year. The Tribunal, following precedent decisions, concluded that the appellants are entitled to claim the deduction of equalized sales tax from the transaction value to determine the assessable value.

Conclusion:
The Tribunal found that the appellants are indeed entitled to claim the abatement of equalized sales tax from the transaction value. Consequently, both impugned orders were set aside, and both appeals were allowed with consequential relief. The stay applications were also disposed of.