TMI Blog1993 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... IR 1979 S.C. 346 - Commissioner of Income-tax (Central) New Delhi v. Bijli Cotton Mills (P) Ltd. 2. 1987 (30) E.L.T. 624 (Tribunal) - Mohan Co., Madras v. Collector of Central Excise, Madras. 3. 1992 (41) ECR 457 (Tribunal) - Collector of Central Excise, Allahabad v. Panchamukhi Engineering Works and Another Shri Sridharan, the learned advocate pleaded that the disputed amount is Rs. 26,60,857.00 and there is a penalty of Rs. 4,00,000.00. He pleaded that the applicants have got a good case on merits. In case the applicants are desired to deposit the duty and penalty amount, it will amount to undue hardship. 2 Shri A.K. Singhal, the learned JDR who has appeared on behalf of the respondent, pleaded that Dharmada receipts are compulsory receipts which have been received by the appellant. He pleaded that statements of the dealers were duly recorded and the dealers in their statements have stated that the appellants were compulsorily asked to make the payment and as such, this has to be included in the assessable value. Shri Singhal pleaded that the judgment in the case of CIT v. Bijli Cotton Mils (P) Ltd. reported in AIR 1979 SC 346 is in an income-tax matter and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow :- Dharmada or Dharmadaya in common parlance, means anything given in charity or for religious or charitable purposes. Among the trading or commercial community in various parts of this country a gift or payment for dharmada is by custom invariably regarded as a gift for charitable purposes. A gift to Dharmada or Dharmadaya , both in common parlance as well as by customary meaning attached thereto among the commercial and trading community, cannot be regarded as void or invalid on account of vagueness or uncertainty. The respondent, a private company carrying on the business of manufacturing and selling yarn, realised certain amounts on account of Dharmada from its customers on sales of yarn and cotton, at the rate of 1 anna per bundle of 10 lbs. of yarn and 2 annas per bale of cotton. In the bills issued to the customers these amounts were shown in a separate column headed Dharmada . The respondent did not credit the amounts so realised by it in its trading account but maintained a separate account known as the Dharmada . The respondent did not credit the amounts so realised by it in trading account, but maintained a separate account known as the Dharmada ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat no obligation to utilise the amounts exclusively for charitable purposes could be said to have been created: (a) the compulsory nature of the payment, (b) the fact that the respondent had some discretion as regards the manner in which and the time when the respondent should spend the Dharmada amounts for charitable purposes; or (c) the facts that the respondent did not keep the amounts in a separate bank account. Keeping in view the facts and circumstances of the case and the findings of the Hon'ble Supreme Court in the case of Commissioner of Income Tax (Central), New Delhi v. Bijli Cotton Mills (P) Ltd. reported in 116 ITR 60 we hold that Dharmada receipts i.e. 0.02 paise per kg. charged by the appellant from his customers in the invoices does not form part of the normal price especially when there is no evidence on record from the Revenue's side that the appellant had used this amount for any other purpose. The argument of the Ld. SDR that the finding by the Hon'ble Supreme Court is under the Income Tax Act, 1961 does not help him. Hon'ble Madras High Court judgment in the case of N.S. Pandaria Pillai v. The State of Madras reported in 1973 (31) STC 108 is much earlier to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected by the assessee from his purchasers on the occasion of the sale and shown separately in the sale bills would form part of the taxable turnover of the assessee, although the purchasers were under no legal obligation to pay the same. We have gone through the judgment of the Hon'ble Madras High Court. The judgment is dated 14-11-1972 and whereas the judgment in the case of Bijli Cotton Mills (P) Ltd. is dated 7-11-1978. This judgment was considered by the Hon'ble Supreme Court in the case of CIT v. Bijli Cotton Mills (P) Ltd. reported in AIR l979 S.C. 346 in paras No. 4 and 17 of the said judgment. This judgment was also duly considered by the Tribunal in the case of Mohan Co. Madras v. Collector of Central Excise, Madras reported in 1987 (30) E.L.T. 624. After considering the submissions of both the sides, we are of the view that the issue is covered by earlier decisions and as such prima facie the applicants have got a good case on merits. Hon'ble Madhya Pradesh High Court in the case of Kinetic Honda Motor Ltd. v. Union of India reported in 1992 (61) E.L.T. 52 (MP) in para No. 7 had held as under :- 7. Considering the above documents annexures E and F, and the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1985 (19) E.L.T. 22 (S.C.) - Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd. Ors. Hon ble Supreme Court in the case of Dunlop India Ltd. and Others (supra) had laid down the principles for the disposal of the stay application by looking into the prima facie merits of the case. In the case of Dunlop India Ltd. (supra) Hon'ble Supreme Court in para 7 on page 28 had held as under :- Where gross violations of the law and injustices are perpetrated or are about to be perpetrated, it is the bounden duty of the court to intervene and give appropriate interim relief. In cases where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizen's faith in the impartiality of public administration, a Court may well be justified in granting interim relief against public authority. But since the law presumes that public authorities function properly and bona fide with due regard to the public interest, a court must be circumspect in granting interim orders of far reaching dimensions or orders causing administrative, burdensome inconvenience or orders preventing collection of public revenue for no better reason than t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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