9911796707
TMI Blog2015 (7) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the clearance of the goods but quantified subsequently and passed on to the customers is an admissible deduction from the transaction value and as such the assessment for such transactions may be made on a provisional basis. - no legitimate ground exists for the department to disallow the petitioner company to pay excise duty on provisional basis on the concerned goods as per Rule 7 of the Central Excise Rules, 2002 since the actual transaction value cannot be determined at the time of removal of the goods from the factory. Denying such permission to the petitioner company would result in forcing the petitioner company to pay more excise duty than it is actually liable to pay - Decided in favour of assessee. - WP 299 of 2015 - - - Dated:- 19-6-2015 - The Hon ble Justice Arijit Banerjee,J. For the Petitioner : Mr. Shounak Mitra, Adv. For the Respondent : Mr. P. K. Roy, Adv., Mr. K. K. Maiti, Adv JUDGMENT Arijit Banerjee, J. (1) In this writ petition, the petitioner prays for a direction in the nature of mandamus directing the respondents to allow clearance of excisable goods manufactured/to be manufactured by the petitioners under provisional asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum-duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods. (2) The provisions of this Section shall not apply in respect of any excisable goods for which a tariff value has been fixed under sub Section (2) of Section 3. (3) For the purpose of this section ( a) assessee means the person who is liable to pay the duty of excise under this Act and includes his agent; . (d) transaction value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty under Rule 7 of the said 2002 Rules. The respondent no. 1 has preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Calcutta (in short the said Tribunal ) against the Commissioner s order dated May 21, 2014 which is pending. There is, however, no stay of operation of the said order dated May 21, 2014. (7) The petitioner company by its letter dated July 31, 2014 applied to the respondent no. 1 for permission to clear the manufactured goods on the basis of provisional assessment for the period of August 1, 2014 to November 30, 2014. A similar application was made by the petitioner company by its letter dated December 2, 2014 for the period of December 1, 2014 to March 31, 2015. These applications of the petitioner company have not been responded to by the respondent no. 1. As a result, the petitioner company is being forced to clear the goods manufactured by it on final assessment basis without taking into account the trade discounts made available by it to its customers, thereby ending up paying excess central excise duty than what is actually payable under the 1944 Act. (8) The petitioners submit that trade discounts known and understood at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. will therefore not form part of the transaction value. What is important is that it must be established that the discount for a given transaction has actually been passed on to the buyer of the goods. The differential discounts extended as per commercial considerations on different transactions to unrelated buyers if extended cannot be objected to and different actual prices paid or payable for various transactions are to be accepted for working out assessable value. Where assessee claims that the discount of any description for a transaction is not readily known but would be known only subsequently as for example, year end discount the assessment for such transactions may be made on a provisional basis. However, the assessee has to disclose the intention of allowing such discount to the department and make a request for provisional assessment. (10) Ld. Counsel for the petitioners referred to a decision of the Hon ble Supreme Court in the case of Union of India-vs.-Arviva Industries (I) Ltd. reported in 2007 (209) ELT 5 wherein the Hon ble Supreme Court after referring to several of its earlier decisions, reiterated that circulars issued under Section 119 of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho permitted the petitioner to clear the goods on the basis of provisional assessment and the order of the Commissioner should be complied with. (14) Appearing on behalf of the department, Ld. Counsel submitted that the requirements of Rule 7 of the 2002 Rules are not satisfied in the instant case and, as such, the petitioners cannot claim clearance of the goods on the basis of provisional assessment. He further submitted that the writ petitioners have approached this court one year after the department filed appeal against the order of the Commissioner and, such delay disentitles the writ petitioners to any relief. Ld. Counsel finally submitted that if the writ application is allowed, the department s appeal against the Commissioner s order permitting clearance of goods on the basis of provisional assessment, would be rendered infructuous. (15) Ld. Counsel for the respondents relied on a decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise and Customs, Mumbai-vs.-ITC Ltd. reported in 2006 (203) ELT 532 wherein at paragraph 21 of the judgment it was observed that a provisional assessment is made in terms of Rule 9B of the Central Excise Rules, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal basis where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto and the assessee makes a request for payment duty on provisional basis giving reasons therefor. This is subject to the assessee executing a bond binding him to pay the difference between the amount of duty as may be finally assessed and the amount of duty provisionally assessed. The grievance of the writ petitioners is that the respondent authorities have acted unreasonably in failing to exercise the power under the said Rule and allowing the writ petitioners to pay duty on provisional basis. (19) It will be seen from what has been stated hereinabove that the petitioner company allows discounts to its buyers. However, since the quantity/turnover discounts are based on and linked to achievement of the target and are allowed on varying rates depending upon the slab which a particular dealer attains in terms of the relevant scheme, it is not possible to quantify the discount at the time of clearance of a particular consignment from the factory or the place of removal. Consequently, the petitioner company is unable to determine the correct transaction va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per Rule 7(2) of the Central Excise Rules, 2002, the interest of the department would be fully protected even if the petitioner is allowed to pay duty on a provisional basis. (22) The power conferred on a public authority or a statute or Rules framed thereunder is coupled with a duty on the authority to exercise such power in fit and appropriate cases. Refusal to exercise such power in a situation which warrants exercise of the power, would amount to an act of unreasonableness and arbitrariness on the part of the authority and such act/ommission is not legally sustainable. If the Court finds that an authority has arbitrarily or unreasonably refused to exercise the power which is causing undue prejudice to a party, the courts must interfere and direct the authority to exercise such power. (23) Furthermore, about one year as elapsed from the date of the order of the Commissioner of Central Excise and there is no order of stay of the Commissioner s order in the appeal which the department claims to have filed before the Tribunal. Hence, it is obligatory on the part of the department to comply with the Commissioner s order and allow the writ petitioners to obtain clearance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
