Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Shyam Steel Industries & Another Versus Deputy Commissioner of Central Excise and Service Tax, Durgapur Div-I & Others

2015 (7) TMI 343 - CALCUTTA HIGH COURT

Provisional assessment - applications of the petitioner company have not been responded to by the respondent (revenue) - As a result, the petitioner company is being forced to clear the goods manufactured by it on final assessment basis without taking into account the trade discounts made available by it to its customers, thereby ending up paying excess central excise duty than what is actually payable under the 1944 Act. - Held that:- value of the goods cannot be determined at the time of remov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

known prior to the clearance of the goods but quantified subsequently and passed on to the customers is an admissible deduction from the transaction value and as such the assessment for such transactions may be made on a provisional basis. - no legitimate ground exists for the department to disallow the petitioner company to pay excise duty on provisional basis on the concerned goods as per Rule 7 of the Central Excise Rules, 2002 since the actual transaction value cannot be determined at the ti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a direction in the nature of mandamus directing the respondents to allow clearance of excisable goods manufactured/to be manufactured by the petitioners under provisional assessment in terms of Rule 7 of the Central Excise Rules, 2002. The facts of the case, in brief are as follows. (2) The petitioner company is engaged in the business of manufacture and sale of, inter alia, MS Billets and TMT Bars. The TMT Bars cleared from the company s factory are either supplied directly to the customers or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on thereof is possible only at the end of the notified period. The dealers fulfilling the qualification conditions become eligible to get duty discount at the end of the notified period, processed by way of credit notes. (3) Central excise duty is leviable on the goods manufactured and cleared by the petitioner company in terms of the provisions of Section 3 of the Central Excise Act, 1944 read with the Central Excise Tariff Act, 1985. The manner of valuation of the excisable goods manufactured .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Explanation - For the removal of doubts, it is hereby declared that the price-cum-duty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n ( a) assessee means the person who is liable to pay the duty of excise under this Act and includes his agent; ……………………………………………………………………………………. (d) transaction value means the price actually paid or payable for the goods, when sold, and includes in addition to the amount ch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther taxes, if any, actually paid or actually payable on such goods. (4) The petitioners submit that in terms of Section 4 (1)(a) of the 1944 Act value of excisable goods for the purpose of charging excise duty thereon is the transaction value as defined in Section 4(3)(d) of the Act. Transaction value is defined to mean the price actually paid or payable for the goods when sold and additional consideration which the buyer is liable to pay to or on behalf of the assessee in connection with the s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce actually paid or payable for the goods being sold by the company. Since the quantity/turn over discounts are based on achievement of the target and are allowed on varying rates depending upon the slab which a particular dealer attains in terms of the relevant scheme, it is not possible to quantify the discount at the time of clearance of a particular consignment from the factory. Hence, the petitioner company being unable to determine the correct transaction value of the concerned excisable g .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

espondent no. 1 rejected the said application of the company. Being aggrieved, the company preferred an appeal before the Commissioner of Central Excise, Calcutta, who by a letter dated May 21, 2014 allowed the appeal holding that there are sufficient reasons for extending the facility of provisional assessment of duty under Rule 7 of the said 2002 Rules. The respondent no. 1 has preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Calcutta (in short the said Tribun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecember 1, 2014 to March 31, 2015. These applications of the petitioner company have not been responded to by the respondent no. 1. As a result, the petitioner company is being forced to clear the goods manufactured by it on final assessment basis without taking into account the trade discounts made available by it to its customers, thereby ending up paying excess central excise duty than what is actually payable under the 1944 Act. (8) The petitioners submit that trade discounts known and under .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uantum of discounts is known only at the end of the achievement of the target by the respective customers and because of their varying rates depending upon the slab which a particular dealer achieves in terms of the scheme under which such discounts are provided. It is, therefore, impossible for the company to determine the correct transaction value of excisable goods on which central excise duty is payable at the time of removal of the said goods from the factory. The actual price paid or payab .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d Rules. (9) Ld. Counsel relied on a circular dated 30th June, 2000 issued by the Central Board of Excise and Customs, Ministry of Finance, Department of Revenue wherein at paragraph 9 it is stated as follows:- 9. As regards discounts, the definition of transaction value does not make any direct reference. In fact, it is not needed by virtue of the fact that the duty is chargeable on the net price paid or payable. Thus if in any transaction a discount is allowed on declared price of any goods an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tablished that the discount for a given transaction has actually been passed on to the buyer of the goods. The differential discounts extended as per commercial considerations on different transactions to unrelated buyers if extended cannot be objected to and different actual prices paid or payable for various transactions are to be accepted for working out assessable value. Where assessee claims that the discount of any description for a transaction is not readily known but would be known only .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

everal of its earlier decisions, reiterated that circulars issued under Section 119 of the Income Tax Act, 1961 and Section 37B of the Central Excise Act, 1944 are binding on the revenue. In that case, the Hon ble Supreme Court referred to its earlier decision in the case of Commissioner of Customs, Calcutta-vs.-Indian Oil Corporation Ltd. reported in (2004) 3 SCC 488 wherein the Hon ble Apex Court held as follows:- (1) Although a circular is not binding on a court or an assessee, it is not open .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ad. (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars. (11) Ld. Counsel for the petitioners then relied on a judgment of this Court in the case of Commissioner of Central Excise, Calcutta-vs.-Black Diamond Beverage Ltd. reported in 2014 (307) ELT 679 wherein this court also observed that a circular issued by the Board binds the revenue and they cannot take a stand that the circular is contrary to the provisions of the statute. (12) Ld. Counsel a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ta reported in 1995 (75) ELT 47 wherein this Court, in the context of the Central Excise Act, 1944, held that mere filing of an appeal against the order of the lower forum does not automatically mean stay of operation of the order of the lower forum. The department is bound to comply with the order of the lower forum unless operation thereof is stayed by the appellate forum. He submitted that there is no stay of operation of the order of the Commissioner who permitted the petitioner to clear the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Commissioner and, such delay disentitles the writ petitioners to any relief. Ld. Counsel finally submitted that if the writ application is allowed, the department s appeal against the Commissioner s order permitting clearance of goods on the basis of provisional assessment, would be rendered infructuous. (15) Ld. Counsel for the respondents relied on a decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise and Customs, Mumbai-vs.-ITC Ltd. reported in 2006 (203 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h Court in the case of Shree Ganesh Steel Rolling Mills Ltd.-vs.- Asstt. Commissioner of Customs, Chennai reported in 2006 (206) ELT 76 wherein at paragraph 28 of the judgment it was observed that Section 18 (1) of the Customs Act does not make it mandatory on the customs officer to make a provisional assessment. The use of the word may in Section 18 (1) indicates that it is the discretion of the customs officer to make a provisional assessment or not, and he is not duty bound to do so. Of cours .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

duty applicable thereto, he may request the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, in writing giving reasons for payment of duty on provisional basis and the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis at such rate or on such value as may be specified by him. (2) The payment of duty on provisional basis may be a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

wered to order payment of duty on provisional basis where the assessee is unable to determine the value of excisable goods or determine the rate of duty applicable thereto and the assessee makes a request for payment duty on provisional basis giving reasons therefor. This is subject to the assessee executing a bond binding him to pay the difference between the amount of duty as may be finally assessed and the amount of duty provisionally assessed. The grievance of the writ petitioners is that th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vant scheme, it is not possible to quantify the discount at the time of clearance of a particular consignment from the factory or the place of removal. Consequently, the petitioner company is unable to determine the correct transaction value of the concerned excisable goods at the time of and place of removal thereof which in turn makes it impossible to assess actual excisable duty payable. Hence, it appears to be a fit case where Rule 7 of the Central Excise Rules, 2002 should be invoked and br .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t scheme period offered to the dealers which is usually after four months. As per paragraph 9 of the Central Board of Excise and Customs circular dated 30th June, 2000 referred to above, discount of any type made known prior to the clearance of the goods but quantified subsequently and passed on to the customers is an admissible deduction from the transaction value and as such the assessment for such transactions may be made on a provisional basis. The said circular is binding on the department .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

petitioner company would result in forcing the petitioner company to pay more excise duty than it is actually liable to pay. In fact, as submitted by Ld. Counsel for the petitioners, for the period August 1, 2013 to November 30, 2013, the petitioner company was compelled to obtain clearance of the goods upon paying excise duty on the basis of full value of the goods without taking into account the trade discounts extended by the petitioner to the dealers. This is, in my opinion, is grossly unfai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ercise such power in a situation which warrants exercise of the power, would amount to an act of unreasonableness and arbitrariness on the part of the authority and such act/ommission is not legally sustainable. If the Court finds that an authority has arbitrarily or unreasonably refused to exercise the power which is causing undue prejudice to a party, the courts must interfere and direct the authority to exercise such power. (23) Furthermore, about one year as elapsed from the date of the orde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version