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TMI Blog2024 (9) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER ( TECHNICAL ) And HON BLE MR AJAY SHARMA , MEMBER ( JUDICIAL ) Shri Rajesh Ostwal , Advocate for the appellant Shri P K Acharya , Superintendent ( AR ) for the respondent ORDER PER : C J MATHEW M/s Mahle Behr India Pvt Ltd, a manufacturer of parts of air-conditioners for motor vehicles and parts of motor vehicles , had registered for the Package Schemes of Incentives, 1993 notified by the Government of Maharashtra which permitted an assessee to retain the tax collected as levy on sales for a prescribed period and the accumulated amount to be remitted to the treasury in five equal annual instalments on expiry of tenth year. In December 2002, the scheme was modified to allow such registered assessees to pre-pay such deferred sales tax at the net present value (NPV) as due discharge of liabilities owed to the treasury. 2. The appellant opted for pre-payment of the amount and on notice issued by central excise authorities on the premise that the difference between the actual collection from 1st April 200 to 31st March 2003 and the amount required to be deposited was, effectively, additional consideration for goods sold, the order [ order-in-original no: PUN-EXCUS-002-COM-008-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturer and only Rs. 25/- will be paid to the Government. The question was whether Rs. 75/- will form part of the transaction value or not. The issue in all the appeals here is not this but a different. Here the issue involved is that the manufacturer assessees were required to collect certain amount as sales tax which was collected by them. The said amount of sales tax was to be paid after a specified period say 11 to 15 years and in the meantime, was allowed to be retained by the law with the assessees. In 2002, the law was amended by which it became optional for the manufacturer assessees to pay the amount either at the end of stipulated period or at any point of time earlier on the basis of net present value (on the date of prepayment) of the amount of sales tax to be paid at the end of deferral period. We also note that there is no discussion about such a scheme in the Super Synotex judgment of the Hon ble Supreme Court. The obvious conclusion is that none of the parties who were appearing before the Hon ble Supreme Court pointed out to the Hon ble Supreme Court that the issue involved in other appeals is different. It also appears to us that none of such affected appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of sales tax actually paid or actually payable at the time and place of removal of the goods. The word payable means to be paid or liable to be paid as per ordinary dictionary meaning. Liable to be paid means, liability in accordance with the law. Therefore, what is permissible to be abated in respect of sales tax is the sales tax, actually paid or actually payable in accordance with the law at the time of removal of the goods. If that liability undergoes any change subsequently, such alterations/ modifications should not have any impact on the determination of the assessable value. This is for the reason that certainty in taxation is a fundamental cannon of taxation; if that cannon is not followed, there will be confusion and chaos in the tax administration. If tax liability is made dependent on a future event, such a law can not be enforced or implemented in a fair and reasonable way. That is the reason why in all the provisions relating to determination of value, right from 1944 onwards, it has been provided in the law that the value has to be determined at the time and place of removal of the goods. In the instant case, the appellants claimed deduction towards sales tax as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PV basis. Therefore, in our view, the appellant cannot be saddled with a tax liability on account of changes in law, which took place several years after the clearance of the goods. xxxxx 5.9 The appellants have relied on a number of judicial pronouncements of this Tribunal in support of their contention that sales tax collected and retained by the manufacturer as an incentive does not change the character of amount collected and they remain as sales tax payable, which is eligible for deduction. However, as Civil appeals filed by the department in all these cases have been admitted by the Hon ble Apex Court, these judgments are in jeopardy till the matter is finally decided by the Hon ble Apex Court and hence they may not have any precedential value. However, it would be relevant to note that the Hon ble Apex Court did not stay any of these orders, which implies the law as interpreted in these orders are still valid and enforceable. In all these judgments (cited in para 3.5 supra), the consistent view taken is that abatement of sales tax granted under the state laws or grant of sales tax incentives does not, in any way, affect the admissibility of deduction towards sales tax while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the classification and price indicated by him at the time of the removal of the goods from the factory gate, the assessee becomes liable to payment of duty on that date and time and subsequent reduction in prices for whatever reason cannot be a matter of concern to the Central Excise Department insofar as the liability to payment of excise duty was concerned. This is the view which was taken by the Tribunal in the case of Indo Hacks Ltd. v. Collector of Central Excise, Hyderabad - 1986 (25) E.L.T. 69 (Tribunal) and it seems to us that the Tribunal s view that the duty is chargeable at the rate and price when the commodity is cleared at the factory gate and not on the price reduced at a subsequent date is unexceptionable. Besides as rightly observed by the Tribunal the subsequent fluctuation in the prices of the commodity can have no relevance whatsoever so far as the liability to pay excise duty is concerned. That being so, even if we assume that the roll back in the price of tyres manufactured by the appellant-company was occasioned on account of the directive issued by the Central Government, that by itself, without anything more, would not entitle the appellant to claim a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case, we hold that the abatement towards sales tax has to be allowed in terms of the sales tax liability (as per law) at the time of clearance of the goods. Such abatement cannot be subsequently altered or restricted to the net present value of sales tax subsequently paid in complete discharge of such sales tax liability. In other words, there is no cause for re-determination of assessable value on account of changes which arose in the sales tax law much after the clearance of the goods. 5.11 The C.B.E. C. has issued a number of circulars clarifying the abatement towards sales tax under various situations. These have been discussed in paragraphs 5.1 to 5.4 supra. From these clarifications, it is very evident that the deduction towards sales tax is permissible based on the amount billed or charged from the customers in accordance with the law irrespective of the fact whether the amount is retained by the assessee or incentives are given by the State Government to the assessee in respect of the sales tax so collected. The present stand of the Revenue goes directly against the instructions contained in the circulars issued by the board. The Hon ble Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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