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2015 (11) TMI 1659 - HC - Central ExciseValuation - includibility - Royalty - royalty being a tax or not - the case of petitioner is that royalty is covered by the words “other taxes” as used in Section 4(3)(d) of the Act of 1944 and, therefore, royalty is not a part and parcel of “transaction value” and, therefore, no excise duty is leviable upon the royalty paid by these petitioners - Held that: - There is a contract between the parties i.e. the petitioners and the respondents-Companies. These petitioners have participated in “Spot E-auction Scheme” for the purchase of coal. The terms and conditions of “Spot e-Auction Scheme 2007” is binding to the parties to this agreement and looking to Clause 4.4 thereof, these petitioners are bound to make payment of statutory levies, surface transportation charges, sizing/beneficiation charges taxes, cess, royalty, stowing excise duty (SED) and other charges. Thus, the contract between the parties is not a statutory contract, but, it is a contract of commercial in nature. The traders-petitioners of coal shall make payment of differential excise duty to the respondents-Coal companies which is wholly owned, managed and controlled by the Central Government. Whenever such type of issues are referred to Larger Bench before the Courts and if the amount of tax is involved which is to be recovered by the Central Government companies or the Government companies by the traders, these differential excise duty is bound to be paid by the traders to the Government companies, even during pendency of the issue, before the Larger Bench so that there may not be any difficulty by the Government or for the Governmental companies for recovery of the differential sovereign dues. Otherwise, if, later on, the matter is decided against the traders or petitioners or private parties, it will be extremely difficult for the Government or by the Government Companies to recover the differential excise duty or sovereign dues. The companies, private or public, may be wound up, but, the Central Government and the instrumentalities of the Central Government will not be wound up. The amount of sovereign dues paid by the companies, public or private, is absolutely safe with the Central Government or with the Governmental companies. Keeping in mind this equilibrium and looking to Clause 4.4 and 11.12 of the terms and conditions of “Spot e-Auction Scheme 2007” and also looking to the fact that the transaction between these petitioners and the respondents-Coal companies is not a statutory contract, but, it is purely a commercial transaction, we, hereby, direct the petitioners-Companies to make payment of differential excise duty to the respondents-Coal companies - petition disposed off - decided against petitoner-assessee.
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