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TMI Blog2004 (2) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... 98 exempted dealers other than manufacturers in including rubber cess in the turnover for the purpose of purchase tax for a limited period. Item 41 of the above exemption notification reads as follows: 41. Dealers other than manufacturers and planters. Part of the turnover being the element of cess payable under the Rubber Act, in the purchase turnover of rubber. 1. The rubber purchased was sold inter-State or transferred to the principal outside the State or to a branch outside not being a manufacturing unit of the consignor. 2. The exemption shall be in respect of goods purchased for the period up to and including 18th December, 1997. 3. Tax, if any, already pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nience. As per rules 33(e), 33A, 33B and 33D(1) of the Rubber Rules, 1955 the excise duty even though payable by the manufacturer can be collected at a later (1)See Madras Rubber Factory Limited v. State of Kerala [1989] 74 STC 56 (Ker) [FB]. stage. The apex court also held that the incidence of excise duty will start from the date of production and therefore the incidence is a part of the price of the goods purchased. The Supreme Court in paragraph 21 of the judgment held as follows: 21. In our opinion, therefore, the incidence of duty is directly relatable to the production of rubber. The character of levy is not altered merely because the payment of duty is deferred till the purchase of the rubber by the manufacturer. The character o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase turnover of rubber. As such cess payable on rubber under the Rubber Act can be included in the sale price of rubber from the point of sale by the planter onwards, retrospectively. But in respect of traders in rubber, Government had not taken any steps so far to include the amount of cess payable as per the Rubber Act in the purchase turnover or in the sales turnover of such dealers/traders and so they were not anticipating any liability. The dealers had therefore no occasion at any time to believe that at some point of time they may be made liable for purchase tax on the rubber cess element. Government consider that immense hardship will be caused to such dealers/traders due to the implementation of the above decision with retro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealers other than manufacturers were exempted as per the notification. Manufacturer as such is a class. Trader as such is a class. Therefore, there is no discrimination within the class and it cannot be stated that such classification is discriminatory. The counsel submitted a decision of the Karnataka High Court in Biological E. Ltd. v. State of Karnataka [1997] 104 STC 234, where it was held that there is no difference between a dealer who is a manufacturer and an ordinary dealer, considering the fact of that case. Here question is entirely different. Earlier purchase tax was demanded only from the manufacturer or the ultimate user and not from the dealer. But, the Supreme Court made clear that rubber cess can be included in the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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