2015 (10) TMI 1727 - CESTAT MUMBAI

Valuation - Determination of transaction value - sales tax Incentive scheme - Difference between the sales tax payable and actual sales tax (equal to NPV) paid - manufacturer-assessees are of the view that the sales tax amount payable was as per the sales tax rate applicable on the goods or the deferred amount of sales tax and thus they are liable to pay excise duty on the price excluding the deferred sales tax payable. Exercising the option to wipe out the deferred tax liability on NPV will not make any difference in their liability to pay excise duty. - demands are pertaining to period beginning prior to 1.7.2000 and in other cases after 1.7.2000.

Held that:- As per old Section 4, normal value was defined under Section 4(4)(d)(ii) and excluded sales tax payable. - Thus under old section, sales tax payable was to be excluded while under new section sales tax actually paid or actually payable to be excluded. But both the normal value and the transaction value are at the time of removal. A combined reading of the definition of time of removal, place of removal and normal value or transaction value would indicate that the normal value or transaction value is required to be determined keeping in view the situation/factors prevailing at the time and place of removal.

When the goods are being cleared (i.e. time of removal) actual sales tax paid is nil but sales tax actually payable is the normal sales tax or what has been collected by the assessee from its customers. Among the terms actually paid or actually payable used in transaction value, actually paid is not relevant in the present set of appeals. What is relevant is actually payable . Actually payable at the time of clearance is the deferral sales tax. Thus, in our view, the amount of deferral sales tax will require to be excluded.

It would thus be seen from the above three circulars that the Board has all along been of the view that under the deferment scheme of sales tax, the sales tax is payable though after a long period of time and since the sales tax is payable, the same will stand excluded from the normal value or the transaction value. -

Difference between the sales tax payable and actual sales tax (equal to NPV) paid - Held that:- As far as the Sales Tax Act authorities are concerned, whole of the deferred sales tax amount payable has been paid by the assessee/dealer. The fact that the said amount has been paid after the clearances of the goods and before the deferred date of payment, to our view will not make any difference. Further, the actual amount paid is equal to NPV (which is less than originally payable), cannot make the amount actually payable at the time and place of removal different, particularly when under Sales Tax Law such a payment is considered as deemed payment of the sales tax payable. Quantum of sales tax payable does not change in the above scheme of pre-payment.

Demand set aside - Decided in favour of assessee.