2011 (1) TMI 980 - AT - Central Excise

Abatement in respect of sales tax payable in the state of West Bengal - Commissioner allowed the claim - contention of Revenue is that the abatement is in respect of actually paid sales tax - Held that - Liability of goods to sale tax is not being doubted. The state allowed sales tax collected to be retained by the manufacturer as incentive. This does not change the character of amount collected. There is a West Bengal incentive scheme which allows the sales tax collected is to be retained by the manufacturer. In view of this, no infirmity in the impugned order. The appeal is dismissed

Summary

Issues:
- Appeal against abatement of sales tax payable in West Bengal

Analysis:
The Appellate Tribunal, Kolkata, heard an appeal filed by the Revenue against an order allowing abatement in sales tax payable in West Bengal. The Revenue contended that the abatement should only apply to actually paid sales tax. However, the Tribunal referred to a previous case involving M/s. Eastern Copper Mfg. Co. (P) Ltd., where a similar appeal by the Revenue was dismissed. The Tribunal upheld the Commissioner's decision, citing the case of Pratap Rajasthan SPI Steel Ltd., which established that the liability of goods to sales tax is not in question, and the state's incentive scheme allowing manufacturers to retain sales tax collected does not change the character of the amount collected. Therefore, the sales tax collected remains payable and eligible for deduction. The Tribunal found no fault in the Commissioner's order based on this reasoning and dismissed the appeal. Consequently, the appeal against the abatement of sales tax payable in West Bengal was also dismissed by the Tribunal.