CA Bimal Jain
Shree Rajasthan Syntex Ltd. & Others (the Respondent) is engaged in the manufacture of yarn and waste of the man-made fiber and availing Sales tax exemption under the Sales Tax Incentive Scheme of 1989 (the Scheme) on the yarn and waste, as issued by the State of Rajasthan. In terms of the Scheme, the Respondent pay only 25% of the Sales tax collected to the State Government. The Revenue issued a SCN alleging that for the period November 1996 to July, 2001, the Excise Duty was payable on 75% of the amount of Sales tax collected but not paid to State Government and the Commissioner confirmed the demand along with penalty. Even, penalty was levied on the individual officers of the Respondent.
Being aggrieved, the Respondent preferred an appeal before the Hon’ble CEGAT, who set aside the order of the Hon’ble Commissioner. Aggrieved by the order of the Hon’ble CEGAT, the Revenue preferred an appeal before the Hon’ble Supreme Court.
The Hon’ble Supreme Court relying on the decision in case of Commissioner of Central Excise, Jaipur II Vs. Super Syncotex (India Ltd.)[2014 301 ELT 273 (S.C.)], held that after July 1, 2000, Sales tax portion collected but not paid to State Government on account of incentive scheme will form part of the transaction value of excisable goods and observed that:
Our Comments: Valuation of Excisable goods for purpose of charging of Excise
duty under Section 4 of the Excise Act was substituted vide 45/2000-CE (NT) dated June 30, 2000 with effect from July 1, 2000, which interalia provide definition of transaction value as:
“(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 does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods;
The phrase “actually paid or actually payable” clarifies that Sales tax will be allowed as deduction when actually paid or payable.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: firstname.lastname@example.org)