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TMI Blog2024 (10) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... aside'. In view of the decisions of the Tribunal, deciding on the dispute arising from the peculiar features of the said scheme of the Government of Maharashtra, the impugned order is set aside - appeal allowed. - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Ms Manasi Patil and Shri Viraj Reshamwala, Advocate for the appellant Shri Xavier Mascarenhas, Superintendent (AR) for the respondent ORDER This appeal of M/s Bharat Forge Limited, against order [order-in-original no. PUN-EXCUS-003-COM-012-14-15 dated 25th August 2014] of Commissioner of Central Excise Service Tax, Pune III, relates to recovery of duty of central excise amounting to ₹ 1,10,74,052/- for the period from 1st July 2000 to 31st March 2006 under section11A of Central Excise Act, 1944, along with applicable interest under section 11AB of Central Excise Act, 1944, besides imposition of penalty of like amount under section 11AC of Central Excise Act, 1944. Briefly, the duty was sought to be recovered, as additional consideration for sale of manufactured goods, on such amount as the appellant, having originally availed Package Scheme of Incentive 1993 of the Government of Maharashtr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer 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 appellants/ respondents have argued issue involved in their cases as we do not find any arguments which have been advanced before us or which were discussed in the case of Kinetic Engineering by this Tribunal as recorded or discussed in the Hon ble Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. 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 per the liability at the time of removal of the goods. Subsequently if that liability got altered due to changes in law or for any other reason, such alteration cannot have any impact or effect on the assessable value of the goods, which were cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncements 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 determining the value for the purposes of Central Excise levy. We are in respectful agreement with the interpretation of law made in these judgments. On the ether hand, the citations relied upon by the Revenue also do not support the Revenue s case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 refund on the price differential unless it is shown that there was some agreement in this behalf with the Government and the latter had agreed to refund the excise duty to the extent of the reduced price. Again in the case of Shri Bhagwati SSK Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 in Paper Products Ltd. v. CCE reported in 1999 (112) E.L.T. 765 (S.C.) held that the circulars issued by the C.B.E. C. are binding on the department and the department is precluded from challenging the correctness of the circulars even on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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