9911796707
TMI Blog1980 (4) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... duty levied under section 3 shall be paid by the collecting agencies into the Reserve Bank of India in the prescribed manner and shall be credited to a fund to be called the Coal Mines Labour Housing and General Welfare Fund, and apportioned under the two separate accounts, to be called the housing account of the Fund and the general welfare account of the Fund, in such manner as the Central Government from time to time may, by notification in the official Gazette, determine. Section 10(1) empowers the Central Government to make rules to provide for "the manner in which the duty levied under sub-section (1) of section 3 shall be collected, the persons who shall be liable to make the payments, the making of refunds, remissions and recoveries, the deduction by collecting agencies of a percentage of the realisations to cover the cost of collection, and the procedure to be followed in remitting the proceeds to the Reserve Bank of India". The procedure for recovery of excise duty imposed by section 3 of the Act when coal and coke is despatched by rail from collieries to any station in India is prescribed by rules 27 to 29 of the Coal Mines Labour Welfare Fund Rules, 1949. The scheme of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amely, road, river and tramways, etc., is prescribed by rules 29 and 30. The scheme of these rules is similar to that of the corresponding rules, i.e., rules 27 to 29 and rules 32 to 38 of the Coal Mines Labour Welfare Fund Rules, 1949. 4.. Section 58(u) of the Mines Act, 1952, empowers the Central Government to make rules "for providing for the levy and collection of a duty of excise (at a rate not exceeding six pies per ton) on coke and coal produced in and despatched from mines", the utilisation of the proceeds thereof for the creation of a central rescue station fund and the administration thereof. Rule 13 of the Coal Mines Rescue Rules, 1959, made in exercise of this rule-making power, provides for imposition and recovery of excise duty on all coal and coke despatched at the rate mentioned therein. This duty is popularly known as rescue cess. Subrule (3) of rule 13 provides for the procedure for recovery of excise duty when coal or coke is despatched otherwise than by rail. The scheme of these rules is the same as is the scheme of the corresponding rules of the Coal Mines Labour Welfare Fund Rules, 1949. 5.. The petitioner is a Government of India undertaking engaged in mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of despatches made by rail when freight is payable by the consignee. When freight is payable by the consignor, the railway administration collects the duties from the consignor, i.e., the owner of the coal mine. After deducting the percentage, as may be fixed by the Government for meeting the collection charges, the railway administration remits the collections so made to the Government. In respect of despatches made otherwise than by rail, the duties are always payable by the owner. There is no provision in the Acts or in the Rules enabling the owner to collect the duties from the purchaser. The owner has to maintain regular account of despatches in a register, has to file monthly returns and has to pay the amount of the duties by the last date of the following month on the basis of self-assessment. The balance amount of duties, if any, after final assessment or reassessment is recovered from the owner. Having regard to the above scheme of the Acts and the Rules, we are unable to agree with the learned counsel for the petitioner that the owner is merely a collecting agent and that the real incident of the duties is on the purchaser. It is only in cases where despatch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are concerned for paying the excise duties and when there is no provision making the purchaser liable for payment of the duties or for enabling the manufacturer or producer to collect the same from the purchaser, it is impossible to hold that the liability to pay the duties is not on the producer or manufacturer and that he is merely a collecting agent. As earlier stated by us, the manufacturer or producer is no doubt able to pass on the duties to the purchaser, but that he does not by force of any statute but under the contract of sale by charging the duties as part of the sale price. The amount of duties so recovered by the manufacturer or producer forms part of his circulating capital and is used by him in his business before he pays the amount as tax to the Government. It may here be recalled that the petitioner's liability to pay the duties in case of despatches otherwise than by rail arises on the last date of the following month and not as and when the despatches are made. For some period, therefore, the petitioner is able to utilise the amount of duties recovered as part of the price from the purchaser as its circulating capital. This is another reason for holding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealer and as there is no statutory power given to the dealer to collect sales tax from the purchaser, if the dealer passes on his tax burden to the purchaser, he does it only by adding the tax in question to the price of the goods sold and thereby the price fixed for the goods including the tax payable becomes the valuable consideration given by the purchaser for the goods purchased and the tax collected by the dealer becomes a part of the sale price as defined in section 2(o) of the Act. This ruling fully applies here. Duties of excise paid under the three Acts by the petitioner and collected by it from the purchasers must, on the same reasoning, be held to be forming part of the sale price. 9.. The learned counsel for the petitioner referred to us the case of Joint Commercial Tax Officer v. Spencer Co.[1975] 36 S.T.C. 188 (S.C.). In that case sales tax collected by the seller of foreign liquor from the purchaser was held not to form part of the taxable turnover of the selling dealer. The reason why it was so held was that under section 21-A of the Madras Prohibition Act, 1937, the seller was required to collect the tax from the purchaser. The burden of the tax was on the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds were despatched by road. We are unable to agree. A reading of the relevant rules leaves no manner of doubt that in respect of despatches made by road the liability is squarely on the mine owner to pay the excise duties. There is no statutory provision in the rules to enable him to collect the duties from the purchasers. The railway administration while remitting the duties can deduct the collection charges, but there is no such provision made for the mine owner. The mine owner is clearly not a collecting agent. Simply because it is the incidence of despatch which makes the duties payable, it cannot be said that the duties cannot form part of the sale price. In the absence of any statutory provision the only manner in which the mine owner can recover the duties from the purchaser is by making the same part of the valuable consideration for the goods sold; there is no other way in which he can recover the duties of excise from the purchaser. 10.. In our opinion, the sales tax authorities were right in treating the duties of excise, i.e., the coal mines welfare cess, stowing duty and rescue cess, recovered by the petitioner from the purchasers as part of the sale price for the go ..... 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