TMI Blog2014 (9) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing in the decision of the HPC or the entitlement certificate to indicate that 50% of the sales tax retained by the assessee on the sale of its vehicles was liable to be adjusted against any capital subsidy entitlement of the assessee. The circular brought to the notice of all concerned that in view of the amended Section 4 of the Excise Act, any amount actually paid or actually payable by way of excise, sales tax and other taxes shall be excluded from the transaction value. It was made clear that if tax is paid at a concessional rate, that amount may be deducted from the transaction value. But, where the tax is not paid at the time of the transaction, but is paid subsequently, as for example, sales tax payable under a deferment scheme, then too the benefit of exclusion would be allowed since the amount would be actually payable. There is no doubt that 50% of the sales tax collected was retained by the assessee and was not actually paid to the exchequer nor was it actually payable since the HPC permitted the assessee to retain that amount. Therefore, whichever way the issue is looked at, the fact remains that the assessee retained with it 50% of the sales tax collected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the manner, for the period and at the scale given hereinafter. (2)A Unit availing tax concession under this rule shall not be entitled to any other tax concession under Section 13-B or Section 25-A of the Act. (3)(c) eligible industrial unit means (1)x x x Note:- The eligibility of units in pipeline shall be determined by High Powered Committee in case of prestigious units and by Higher Level Screening Committees in other cases. The decision of High Powered Committee/Higher Level Screening Committee shall be final. (4)xxx xxx xxx (5)(a) Subject to other provisions of this rule, an eligible industrial unit (except a prestigious unit) holding a valid entitlement certificate shall be entitled to the concession of deferment of payment of sales tax including central sales tax and conversion of the same to capital subsidy, computer on the sale of goods (including by-products and waste) manufactured by the unit of arising from the process of manufacturer and declared in the sales tax returns filed by the unit, without taking into account the rebate admissible under Section 15A or the rules framed under the Act, at the scale, subject to the time limit and the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above decision, Rule 28-C and the entitlement certificate issued to the assessee, a tax concession of ₹ 564.35 crores could be availed of by the assessee between 1st August, 2001 and 31st July, 2015. The assessee could collect sales tax from its customers but was required to deposit only 50% thereof with the exchequer while retaining the balance 50% by way of a tax concession. It was alleged that the retained sales tax was neither actually paid nor actually payable to the State Government. Under these circumstances, the sales tax retained by the assessee constituted a part of the transaction value of the vehicles sold by the assessee to the customers in terms of the definition of that expression in Section 4(3)(d) of the Central Excise Act, 1944 (hereinafter referred to as the Excise Act). 6. The definition of Transaction Value in Section 4(3)(d) of the Excise Act reads as follows:- Transaction Value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as follows:- Section 25A. Deferment of tax.- Notwithstanding anything to the contrary contained in this Act, the State Government, if satisfied that it is necessary and expedient so to do in the interest of industrial development of the State, may defer the payment of tax by such class of industries, for such period, either prospectively or retrospectively, and such to such conditions, as may be prescribed. 13. It was further contended by the assessee that Rule 28-C was required to be read along with Section 25A of Act and in terms of sub-rule 5(a) of Rule 28-C read with the entitlement certificate granted to the assessee, payment of sales tax was deferred and permitted to be converted into capital subsidy to the extent mentioned in the entitlement certificate. 14. It was also argued that the deferment of sales tax in the case of the assessee was not a concession as contemplated under Section 13B of the Act. Consequently, since 50% of the sales tax collected by the assessee from its customers was to be adjusted against the subsidy granted by the State Government, that amount could not be included in the transaction value of the goods. 15. The Tribunal accepted the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of tax concession to prestigious units and for the implementation of this decision, an entitlement certificate would be issued to the assessee. The Revenue is right in its contention that the decision of the HPC clearly does not support the case of the assessee. 20. Pursuant to the decision of the HPC, the assessee was issued an entitlement certificate in Form ST 72B of the Rules. The entitlement certificate reads as follows:- Form ST 72B [See Rule 28C(3)(d), (8)(a)(c)] ENTITLEMENT CERTIFICATE under Rule 28C of the Haryana General Sales Tax Rules, 1975 It is hereby certified that the industrial unit in the name and style of M/s Maruti Udyog Limited, Gurgaon (Place) office address 11 th Floor, Jeewan Parkash, 25 Kasturba Gandhi Marg, New Delhi-1 holding registration certificate No.1818132 under the Haryana General Sales Tax Act, 1973, with date of validity from 25.01.1993 is entitled to tax concession in accordance with the provisons of Rule 28C, for the period from 01.08.2001 to 31.07.2015 2. Subject to the provisions of Rule 28C, this certificate is valid for the period from 01.08.2001 to 31.07.2015. From the date Quantity of tax Signature of Signature, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 nor is it in consonance with the entitlement certificate issued to the assessee nor is it in consonance with Rule 28-C(5)(b). As mentioned above there is nothing in the decision of the HPC or the entitlement certificate to indicate that 50% of the sales tax retained by the assessee on the sale of its vehicles was liable to be adjusted against any capital subsidy entitlement of the assessee. 24. Learned Additional Solicitor General contended that Section 13B of the Act which relates to the power to exempt certain class of industries from payment of tax is also relevant. We are not inclined to consider this submission since the very basis on which the Tribunal has proceeded namely the application of Rule 28-C(5)(a) is not only incorrect but the Tribunal has overlooked the decision of the HPC and the entitlement certificate apart from overlooking Rule 28-C(5)(b). 25. Finally, our attention was drawn to a circular dated 30 th June, 2000 issued by the Central Board of Excise and Customs. This circular was issued in view of the coming into force of Section 4 of the Excise Act (as amended) from 1st July, 2000. 26. The circular brought to the notice of all concerned that in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the amount of about ₹ 22.44 crores retained by the assessee. 29. In our opinion, the Tribunal misdirected itself in law on several counts and erroneously decided the appeal in favour of the assessee and, therefore, the order of the Tribunal is set aside. 30. It was eventually submitted by learned counsel for the assessee that on the facts and in the circumstances of the case penalty ought not to be imposed upon the assessee particularly since the assessee bona fide believed on the basis of the correspondence entered into with the Revenue that the 50% sales tax retained by it was adjustable against capital subsidy and also that there was at least the decision of the Tribunal in its favour in regard to the entitlement of the assessee. We agree with learned counsel only to the extent that since the assessee had succeeded before the Tribunal, it would not be appropriate to saddle it with any penalty. Conclusion 31. Accordingly, while we restore the order of the adjudicating authority dated 22nd May, 2003 and set aside the order of the Tribunal dated 16th January, 2004, we set aside the penalty imposed on the assessee. 32. The appeal is allowed to the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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