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2004 (2) TMI 67 - SC - Central ExciseWhether administrative charges collected by the sugar factory for molasses sold from the buyers/allottees on behalf of the State Government in terms of Section 8(5) of the U.P. Sheera Niyantran Adhiniyam, 1964 constituted a duty or impost in the nature of a tax and consequently not includible in the value as defined in terms of Section 4(4)(d)(ii) of Central Excise Act, 1944? Held that:- One of the tests for determining as to whether the impost is a 'tax' or 'fee' would, in my opinion, be whether the burden can be passed to the end-user. Under the State Act, the same is permissible. A 'fee' in a situation of this nature cannot be passed on to the end-user, a 'tax' can be. In any event regulatory fee imposed for the purpose of regulating the industry producing molasses, in my opinion, cannot be passed on to the buyers as they are not subjected to any regulation under the Act. The nature of impost is such that burden thereof is to be borne by the buyers and the respondents herein are merely the agents for collecting the same on behalf of the State. The impost, therefore, cannot be termed as a 'fee' so as to deprive the respondents of the benefit of deduction of the tax for the purpose of Section 4(4)(d)(ii) of the Central Excise Act, 1944. We may also notice that in terms of Rule 23 of the U.P. Sheera Niyantaran Niyamawali, 1974, the occupier of a sugar factory is obligated to deposit the administrative charges even prior to delivery of molasses and recovery thereof from the buyers. The impost levied in terms of the said Act must, thus, be held to be a special tax applicable to a section of the people, namely, buyers of molasses. I am also of the opinion that Kisan Sahakari Chinni Mills Ltd. (2001 (8) TMI 119 - SUPREME COURT OF INDIA) holding that the impost impugned therein did not have a backing of a statutory provision and, thus, would not be a tax. But it was clearly held that the same would be so if the levy is imposed by any Central or State legislature or any statutory authority lays down the correct law.
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