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2014 (5) TMI 609 - HC - VAT and Sales TaxValidity of Tribunal Order - Includibility of duty drawback in Total Turnover - Rule 3 of the Customs and Central Excise Duties Drawback Rules, 1971 'sale price', 'turnover', Explanation 2 to Section 2(r) and 'sale' in Section 2(n) of Tamil Nadu General Sales Tax Act Notification - Whether the duty drawback received could be treated as part of sale consideration to fall under 'turnover' Deletion of penalty - u/s 16(2) Held that:- Sale being a bilateral transaction, all expenses incurred by the dealer to put the goods in a deliverable state alone form part and parcel of the selling price - Post sale expenses incurred like freight and cost of installation, separately charged for after the sale of the goods, are excluded from price - The levy of tax being on the sale of goods and the turnover being the aggregate amount for which goods are brought or sold, the Act seeks to take note of only such of those receipts received by the vendor from the purchasers in connection with the sale and nothing beyond - This means, any amount received by an assessee from any other party, not connected with the sale, cannot be brought within the definition of 'turnover' for assessing the same under the provisions of the Act. Relying upon NEYVELI LIGNITE CORPORATION LTD v. CTO [2001 (9) TMI 926 - SUPREME COURT OF INDIA] - Where the receipt is from any third party who has nothing to do with the sale and the payment has no relevance or reference to the sale, the same could not form part of the sale transaction; hence, there is no question of including the same under the head of 'turnover' - The includability of any payment received by a dealer as part of the sale transaction depended on the fact as to whether the payment has any relevance to the contract of sale to treat the receipt as part of the sale consideration - As the definition of turnover, total turnover and sale go, it is only those payments made by the purchaser, including those liability of the seller that the purchaser undertakes to discharge on behalf of the vendor, can be treated as the amount for which goods are bought or sold or supplied - Post-sale freight separately charged for in the bill would not form part of the turnover. The excise duty element was only on the intermediary product and that there was no duty on the final product falling under Sub Heading No. 56.07 in terms of Notification No. 61/87 C.E. dated 01.03.1987 - When the duty drawback was as per the scheme given under the Excise and Customs Rules and that there was no agreement between the purchaser and the seller on the aspect of duty drawback and it never received any consideration and rightly so in the sale effected, the question of roping in those receipts from the Government of India long after the sale does not arise, to be included in the turnover for the purpose of assessment - The difference in price charged by the assessee in respect of sale to coastal vessels and to the foreign going vessels has no relevance at all and it is not the decisive factor in considering the question of taxability of the receipt - So long as the assessee was able to show that the receipt was as per the provisions of Central Excise and Customs Act and the Rules made thereunder with reference to export of goods manufactured from out of duty suffered goods, and the transaction thus answer the definition of 'export' as given under the Duty Drawback Rules, the State is not justified in taxing this receipt as part of the turnover - Order of Tribunal set aside and the revisions are allowed - As far as the penalty aspect is concerned, in the light of the order passed by this Court, Revision filed by the Revenue fails Decided in favour of Assessee.
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