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TMI Blog2004 (1) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax concession. Its liability to pay sales tax is deferred for a period of 14 years. At the same time, it is granted capital subsidy equal to 50% of the sales tax collected from customers in respect of vehicles cleared from Plant No. 2 for 14 years with a maximum limit of Rs. 564.35 crores. The net effect is that 50% of sales tax which is actually payable by the assessee to the State Government is adjusted against capital subsidy due to it from the State Government instead of the assessee remitting the amount in the treasury and State Government paying back the same to the assessee. Thus, it cannot be contended that the appellant was claiming abatement in respect of sales tax not actually paid or payable. If set-off is not to be taken into account for calculating the amount of sales tax permissible as abatement for arriving at the assessable value under Section 4 and what is deductible is the amount legally permissible under the local sales tax law the same principle should apply in the case of the appellant. It is entitled to claim deduction of the amount legally permissible under the Haryana General Sales Tax Act. The fact that there is an adjustment between the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e incentive scheme is not eligible for abatement under Section 4(3)(d) of the Act and excise duty is payable on the sales tax element. Accordingly duty demand was confirmed under the proviso to Section 11A and a penalty of Rupees one crore was imposed. Aggrieved by the above order the assessee has come up in appeal. 3.It is contended on behalf of the assessee that the Commissioner has not properly appreciated the nature of the incentive scheme and that he has given a wrong interpretation to the term 'actually paid or actually payable' in the definition of 'transaction value' under Section 4(3)(d) of the Act as it stood after July, 2000. Sections 13, 13A and 13B of the Haryana General Sales Tax Act enables the State Government to exempt particular goods or particular persons from payment of sales tax. In such a case the specified person or persons dealing with specified goods are not required to pay any sales tax to the Government. Section 25A deals with deferment of tax and provides that the State Government may defer payment of tax by specified class of industries in the interest of industrial development of the State. Section 25A reads as follows : "25A. Deferment of tax. - Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax paid shall accrue to the unit by operation of these provisions. Explanation I - For the purpose of calculation of benefits availed of under the rule, tax payable including the component of tax to be converted into subsidy shall be taken into account. … Illustration - Owner of a unit purchased goods worth Rs. 1,000 locally from Haryana and used them in manufacture of goods which he sold for Rs. 2,500. He paid Rs. 20 as tax at the time of purchase of goods which were taxable at the first stage and Rs. 30 become payable by him on other goods taxable at the last stage. The tax payable on sale of manufactured goods is Rs. 120. The scale of concession admissible to him is 50%. He is entitled to defer the payment of Rs. 60 (50% of Rs. 120) and retain the same as capital subsidy from the State. He is required to pay Rs. 30 as purchase tax (same as in a normal case) and Rs. 10 as sale tax (Total sale tax: Rs. 120 minus capital subsidy: Rs. 60 minus rebate admissible: Rs. 50) in the Government treasury. … (5)(b) Decision about the grant of tax concession to prestigious unit shall be taken by the High Powered Committee on the basis of factors like employment generation, likely rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant on Circular No. 378/11/98-CX., dated 12-3-98 and CBEC Circular No. 671/62/2002-CX., dated 9-10-2002. According to the appellant its case is covered by the ratio of the decision of this Tribunal in Super Syncotex (India) Ltd. v. CCE, Jaipur - 2003 (160) E.L.T. 859 (T) = 2003 (58) RLT 130. 6.Learned Counsel for the appellant further submitted that according to the scheme 50% of the amount that has to be paid by the appellant as sales tax to the State Government is being adjusted against subsidy granted to the appellant by the State Government. Therefore, the appellant is entitled to claim abatement of the sales tax element as it is actually paid or payable. Reliance is placed by learned Counsel for the assessee on the following statement : "Adjustment of cross-claims, a settlement in account, an exchange effected by a book entry, or a set-off, would be equivalent to actual receipt of a sum of money although no money may pass". [The Law and Practice of Income Tax by Kanga and Palkhivala, Eighth Edition - Volume-I Page 210] 7.Learned Counsel brought to our notice Circular Nos. 496, dated 25th September, 1987 and 674 dated 29th December, 1993 issued by Central Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular dated 12-3-98. Learned Commissioner also took the view that circular dated 9-10-2002 is also of no help to the assessee. According to the Commissioner the two circulars issued by the Central Board of Direct Taxes relied on by the appellant are also of no assistance to it. 10.Learned Departmental Representative while supporting the order impugned mainly relied on the definition of the term 'transaction value'. He submits that since the definition excludes only the duty and tax actually paid or actually payable on such goods, the appellant cannot claim abatement unless sales tax was actually paid or payable. 11.After examining the provisions contained under Sections 13, 13A, 13B and Section 25A of Haryana General Sales Tax Act, 1975, we are of the view that what is contemplated under Section 25A cannot be treated as a concession in the nature of sales tax concession granted under Sections 13, 13A and 13B. The provisions under Rule 28C of Haryana General Sales Tax Rules, 1975 would clearly show that the procedure prescribed therein relates to deferment of tax under Section 25A and not in relation to any other concession in payment of sales tax. If that be so, the scheme en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... currently the actual receipt by the appellant from Barber of payment of his debt for goods supplied". Their Lordship followed the view taken by Mellish L.J. In Re : Harmony and Montague Tin and Copper Mining Co., Spargo's case 28 L.T. 153 as follows : "Nothing is clearer than that if the parties account with each other, and sums are stated to be due on one side and sums of an equal amount due on the other side on that account, and those accounts are settled by both parties, it is exactly the same thing as if the sums due on both sides had been paid. Indeed, it is a general rule of law, that in every case where a transaction resolves itself into paying money by A. to B., and then handing it back again by B. to A., if the parties meet together and agree to set one demand against the other, they need not go through the form or ceremony of handing the money backwards and forwards". It is advantageous to refer to the observation of Lord Lindley on this issue in Gresham Life Assurance Society v. Sishop [1902] AC 287 as follows : "First, let us consider what is meant by the receipt of a sum of money. My Lords, I agree with the Court of Appeal that a sum of money may be received in mor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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