2002 (4) TMI 117 - AT - Central Excise

Summary

Issues:
1. Whether turnover tax is deductible from the assessable value.
2. Whether the burden of turnover tax was borne by the assessee.

Analysis:

Issue 1:
The case involved a refund claim by the respondents, who manufactured Pan Masala, for the excise duty paid in excess amounting to Rs. 19,88,887. The respondents claimed that turnover tax of 2.5% was not included in the assessable value at the time of goods removal, and thus, it was deductible. The Commissioner (Appeals) allowed the refund, stating that the refund claim was just and lawful based on relevant judgments. The Revenue argued that turnover tax was not included in the assessable value and, therefore, could not be deducted. However, the Tribunal noted previous judgments supporting the deduction of turnover tax from the assessable value. Consequently, the Tribunal upheld the Commissioner's decision to allow the refund.

Issue 2:
The second issue was whether the burden of turnover tax was borne by the assessee. The Revenue contended that the burden was not passed on to the customers as the turnover tax was not known at the time of goods removal. The respondents argued that the turnover tax, retrospectively levied and paid by them, was not passed on to the buyers. The Tribunal observed that since the turnover tax was collected after the goods were cleared, the burden was not transferred to the customers. Therefore, the Tribunal rejected the Revenue's appeal and upheld the Commissioner's decision to allow the refund claim.

In conclusion, the Appellate Tribunal upheld the decision of the Commissioner (Appeals) to allow the refund claim of Rs. 19,88,887, as the turnover tax was held to be deductible from the assessable value, and the burden of turnover tax was not passed on to the customers in this case.