2018 (1) TMI 704 - AT - Central Excise

Valuation - includibility - Department was of the view that the amount recovered by way of sales tax and not paid to the Sales Tax department should be considered as part of the assessable value and will be liable to payment of Central Excise duty - Held that - the amount which was categorized as other income was recovered as sales tax but not paid to the sales tax department - As per the definition of transaction value in Section 4(3)(d) such amount cannot be excluded from assessable value since it has lost the colour of tax being neither paid nor payable as tax. Hon ble Supreme Court in the case of CCE vs. Super Synotex 2014 (3) TMI 42 - SUPREME COURT has categorically held that after 1.7.2000 unless the sales tax is actually paid to the sales tax department no benefit towards excise duty can be given under the concept of transaction value under section 4(3)(d) and the same is includable. Appeal dismissed.

Summary

Issues:
Appeal against Order in Appeal No. 362/2012 dated 21.11.2012 for the disputed period of 2006-2007 regarding inclusion of certain amounts categorized as 'other income' in the assessable value for Central Excise duty.

Analysis:
The appellant, engaged in manufacturing transformers and other goods, retained amounts categorized as 'other income' related to sales tax but not paid to the sales tax department. The department contended that such amounts should be included in the assessable value for Central Excise duty. The appellant appealed against this decision.

The definition of transaction value under section 4(3)(d) of the Central Excise Act, 1944 allows exclusion of amounts actually paid or payable as tax. In this case, the appellant retained amounts beyond what the sales tax department recovered, categorizing it as 'other income'. The lower authority held that this should be included in the transaction value for excise duty calculation.

The Tribunal noted that the 'other income' retained by the appellant, which was related to sales tax but not paid to the sales tax department, cannot be excluded from the assessable value. Referring to a case law, the Tribunal distinguished the present case from a previous judgment where sales tax paid was remitted back as an incentive, leading to a different outcome.

Citing a Supreme Court decision, the Tribunal emphasized that unless sales tax is actually paid to the department, no benefit can be given under the concept of transaction value for excise duty calculation. Therefore, the Tribunal found no grounds to interfere with the impugned order, ultimately dismissing the appeal.

In conclusion, the Tribunal upheld the decision to include the 'other income' amounts in the assessable value for Central Excise duty, based on the definition of transaction value and relevant legal precedents, leading to the dismissal of the appellant's appeal.