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TMI Blog2019 (4) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... in these two petitions. Hence, both these petitions are taken up together, heard and disposed of by this common order. 3. The brief factual matrix is that the appellant is a company incorporated under the Companies Act. It is a registered dealer under the Assam Value Added Tax Act, ("VAT Act" in short), Central Sales Tax Act and Assam Entry Tax Act ("Entry Tax Act" for short). The petitioner is engaged in the business of refining crude oil procured from M/s Oil India Ltd. and M/s ONGC Ltd. through the installed pipelines. 4. Since, the crude oil purchased by the appellant from the said entities which are located in another local area would enter the local area as defined under the Entry Tax Act, the issue is with regard to the payment of appropriate quantum of entry tax for the assessment years 2011-12 and 2012-13. The fact that the petitioner is an importer as defined under the Entry Tax Act and that it is liable to pay the entry tax on the crude oil procured from Oil India Ltd. and ONGC Ltd. is not in dispute. However, the only issue that has been raised for consideration is as to whether the respondents can collect the entry tax based on the value of invoice which also include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be false, or if such goods have been procured or obtained otherwise than by way of purchase, the import value shall be determined on the basis of fair market value of such goods;" (emphasis supplied) 7. Further contention on behalf of the petitioner is that though VAT at the rate of 5 % is included in the invoice, the same is attracted only at the sale point after the petitioner received the crude oil at Numaligarh and the other process with regard to the actual quantity and quality is decided and the imported crude oil is ready for further process by the petitioner. In that view, it is contended that as per the understanding between the petitioner which is an importer and its supplier, the crude oil is sent through pipeline and at the entry point to the local areas, the VAT is not attracted and, as such, the value of the imported crude oil at the point of entry into local area less the VAT amount indicated in the invoice is to be taken for the purpose of levying the entry tax. In that regard, it is contended that the phrase "all other charges incidentally levied on the purchase of such goods" contained in Section 2(f) of the Entry Tax Act cannot be considered as permitting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t taken as the invoice value as contained in the first part of the provision, would fall under the other charges incidentally levied on the purchase of such goods. The fact that the petitioner is liable to pay VAT on the crude oil purchase cannot be in dispute. If that be so, the issue is as to which of the points should be considered as the entry point when the purchase is made in the local area of Numaligarh. 10. The learned senior counsel for the petitioner has very vehemently articulated his argument by referring to a self serving diagram which is reproduced here under. The two local areas are depicted and the periphery of Numaligarh is indicated as the entry point by marking it as 'A' and contended that the liability to pay VAT would arise only at Numaligarh Refinery at Golaghat marked as 'N' after further process whereas, the entry tax is chargeable at point 'A' after it is despatched from point 'O' : 11. It is his contention that after several other procedures are followed after the entry at point 'A' relating to the evaporation report, the goods which are not as per specification and a final analysis is made, the VAT would become payable at point 'N'. In that light, to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed this contention by observing that it would be open to the dealer to choose either the sale price or the purchase price whichever is favourable to him for computation of his liability to tax. This approach overlooks the specific language of Section 3 which clearly indicates what price is to be taken into account for computing the tax. When the goods are brought within the local area they have a certain price. The price may be the price which the importer of goods has paid before bringing the goods within the local area. Even if the dealer is the manufacturer of goods at a place outside the local area and brings the goods within the local area he must have determined the price of the goods. Therefore, the dealer has some specific price of the scheduled goods which are being brought within the local area at the time of entry in the local area and the entry being the taxing event that would be the price which alone can be taken into account for computing the tax ad valorem. Therefore, we find it difficult to agree with the reasoning adopted by the High Court in rejecting the contention but for the reasons hereinabove mentioned the contention is devoid of merits and accordingly it mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the invoice when crude oil continues to pass through the pipeline without any check being made at point 'A'. The learned senior counsel for the petitioner has also relied on the decision of the Hon'ble Supreme Court in the case of Union Carbide India Ltd. v. Collector of Central Excise, Calcutta, 2003( 158)ELT 15 (SC) to contend with regard to the distinction in the terms of 'value' 'price' and 'cost'. However, we notice that the issue was considered in the context of excise duty wherein the assessee had already paid the duty on granules which was used for manufacture of batteries. In that context, relating to the cost of production it was observed that it cannot be proceeded on the basis as if the granules was obtained for the first time. 14. The learned senior counsel for the respondents would, on the other hand, rely on the decision of the Hon'ble Supreme Court in the case of State of Kerala and Others vs. Fr. William Fernandez and Others (2017) 12 SCC 463. In the said case, amongst others, the issue which also arose for consideration is as to whether Section 2(d) read with section 3 of Orissa Entry Tax Act, 1949, Section 2 (d) read with section 2 (d) of Kerala Act, 1993 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the local area for the purpose of levy of entry tax. He contends that unlike the said position, in the instant case, as repeatedly contended, at the point of entry to the local area VAT is not attracted and therefore, the consideration made therein would not cover the instant case. 16. Though such contention is put forth we have already taken note that an entry point to be created only because it is the periphery of the local area would not be justified when the delivery of the crude oil is through pipeline. Hence, the point of delivery in the local area will have to be considered as the entry of goods to the local area. If that be the position, even if the contention that the processing is to be done at the refinery and only thereafter VAT would be payable is taken note of, when as per the decision of the Hon'ble Supreme Court, the same is also incidental to the purchase, irrespective of the fact as to whether the same is included in the invoice or not it would get attracted. The value of the VAT also would, therefore, get included in the import value for the purpose of processing the entry tax as it would fall under "other charges incidentally levied on the purchase of such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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