9911796707
TMI Blog1998 (4) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... r relevant to the asst. yr. 1990-91 the Tamilnadu Government increased excise duty on spirit and also levied vend fee on the distilleries. The distilleries in turn passed on the increased liabilities to the customers, such as the assessee. Meanwhile, the distilleries had challenged the levy in the Court and the Supreme Court by the judgment dt. 25th Oct., 1989, declared as unconstitutional the vend fee and also the duties in respect of industrial alcohol. Thereafter, the Government of Tamil Nadu by an order dt. 3rd Feb., 1990, withdraw the vend fee and excise duty on various kinds of spirit with retrospective effect from 25th Oct., 1989. In the notes accompanying the statement of accounts for the year ending 31st March,1990 (relevant for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on 31st March, 1990, and that the assessee had also made the claim for refund through M/s Coimbatore Alcohol Chemicals Ltd. and so on accrual basis the amount was rightly assessable for the asst. yr. 1990-91. 3. We have heard the Departmental Representative Shri Shaji P. Jacob, and the assessee's representative Shri V. Satyanarayanan, chartered accountant. The contention of the Department is that once the order was passed by the Government of Tamilnadu on 3rd Feb., 1990, there was accrual of income so far as the assessee was concerned and as the excise liability by way of excise duty and vend fee had been allowed as deduction in the earlier years on the basis of the order of the State Government, the amount concerned was assessable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased spirit in the earlier years. The learned representative explained that when the State Government enhanced excise duty and also charged vend fee, the assessee had paid excess amounts to M/s Coimbatore Alcohol Chemicals Ltd., from whom it was purchasing spirit. Shri Satyanarayana also filed before us a copy of the order of the Tamilnadu Government in GO (MS) No. 167, dt. 3rd Feb., 1990. In that order it is made clear that "the Government have decided to withdraw with effect from 25th Oct., 1989, i.e., the date of judgment of the Supreme Court the excise duty and vend fee leviable on various kinds of spirits such as rectified spirit, denatured spirit and methylated spirit, etc. issued for several purposes, namely for industrial use, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee forwarded the application in the prescribed form in triplicate to M/s Coimbatore Alcohol Chemicals Ltd. for refund of the excess amount. On 16th July, 1992, the assessee wrote to the company secretary, M/s Coimbatore Alcohol Chemicals Ltd. as under: "We had made enquiries at the office of the Commissioner of Prohibition and Excise, Madras regarding refund of the excise duty of Rs. 45,69,600 as recommended by the Distillery Officer. We were informed that the amount will be paid direct to Travancore Sugars and Chemicals Ltd., Thiruvalla if a no objection certificate is obtained from you for receiving the payment direct. We request you to issue us a no objection certificate to receive payment and oblige." But still no amount wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Chemicals Ltd. in the previous year relevant to the asst. yr. 1990-91. The order passed by the Government of Tamilnadu on 3rd Feb., 1990 only authorised the Distillery Officers to refund the excess amount to the consumers after complying with certain formalities. As a matter of fact, in accordance with their directions the assessee made a formal claim for the refund in the prescribed form or application only on 29th May, 1992. Then there was the no-objection certificate to be obtained from the distillery. These could be seen from the assessee's letter dt. 16th July, 1992. In the light of the above facts, we agree with the learned representative of the assessee that there was no income by way of refund of excise duty and vend fee accruin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end fee and the additional vend fee in question are the price paid by the assessee-corporation to the State Government for acquiring from the State Government the exclusive right and privilege in question, then the fact that these were levied and collected under the Prohibition Act along with excise duty, or the fact that the magnitude of the levy is disproportionate to the services rendered, or the compulsory nature of the levy, or even the fact that the incidence of the levy was on the ultimate consumers as in the case of excise duty on liquor—considerations which weighed with the lower authorities—do not alter the nature of the levy. The levy remains what it essentially is, namely the price paid in a purely commercial transaction to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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