TMI Blog2015 (10) TMI 1727X X X X Extracts X X X X X X X X Extracts X X X X ..... xcluded. But both the normal value and the transaction value are at the time of removal. A combined reading of the definition of time of removal, place of removal and normal value or transaction value would indicate that the normal value or transaction value is required to be determined keeping in view the situation/factors prevailing at the time and place of removal. When the goods are being cleared (i.e. time of removal) actual sales tax paid is nil but sales tax actually payable is the normal sales tax or what has been collected by the assessee from its customers. Among the terms actually paid or actually payable used in transaction value, actually paid is not relevant in the present set of appeals. What is relevant is actually payable . Actually payable at the time of clearance is the deferral sales tax. Thus, in our view, the amount of deferral sales tax will require to be excluded. It would thus be seen from the above three circulars that the Board has all along been of the view that under the deferment scheme of sales tax, the sales tax is payable though after a long period of time and since the sales tax is payable, the same will stand excluded from the normal value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustomers in a particular year, the payment of the same to the State Government is deferred. In the meantime, money so collected is used by the manufacturer assessees in their business. In November 2002, the Bombay Sales Tax Act, 1959 was amended so as to provide an optional scheme for payment of sales tax so deferred in advance on its net present value (NPV). Thus the said amendment in the Act provided an option to prematurely pay in place of the deferred tax amount, an amount equal to the NPV of the deferred tax. This option could be exercised anytime between the normal due date for payment of sales tax to the final deferred date. NPV amount will, of course, vary with the date of payment as also the final deferred date. On making payment of NPV, the deferred tax is deemed to have been paid. 2. All the manufacturer-assessees in these appeals have availed benefit of deferred sales tax scheme and thereafter opted to pay the deferred tax in advance. Amount paid was equal to NPV and not the originally deferred amount. With this payment, total liability to pay sales tax extinguished. 3. At the time of clearance of the goods, the excise duty was paid based upon the sale price exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute that sales tax actually payable is to be allowed as deduction under Section 4 of the Act. The amount of sales tax shown in the invoices raised on the customer is the amount actually payable and the same is not paid due to an incentive given by the State Government. Under the said Incentive Scheme, there is no exemption from payment of sales tax. By immediately paying the sales tax collected, on the NPV, the assessee is deemed to have paid the entire amount of sales tax collected by it. Under the deferment scheme, the assessee would have paid the sales tax to the State Government after the deferred period, say, 15 years. However, the State Government came out with an immediate payment scheme stating that after 15 years, the member would have paid sales tax to the State Government amounting to say, ₹ 100/-, however, the NPV of the said ₹ 100/- to be paid after 15 years as on a day, is ₹ 25/-. Hence, upon payment of ₹ 25/- now, the entire ₹ 100/- which is supposed to be paid after15 years, is deemed to be paid. Proviso to Section 38 of Bombay Sales Tax Act 1959, clearly states that upon payment of sales tax payable on NPV, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laining the provisions of new Section 4 which would come into force from 01/07/2000. In the said instructions in Paras 10 11, it was clarified as follows: 10. As regards exclusion of taxes while working out assessable value, the definition of transaction value itself mentions that whatever amount is actually paid or actually payable to the Government or the relevant statutory authority by way of excise, sales tax and other taxes, such amount shall be excluded from the transaction value. In other words, if any excise duty or other tax is paid at a concessional rate for a particular transaction, the amount of excise duty or tax actually paid at the concessional rate shall only be allowed to be deducted from price. The assessee cannot claim that the excise duty or tax payable at the normal rate should be allowed to be deducted. The words actually paid have, therefore, been used to the definition of transaction value to reflect the legislative intention as explained above. 11. The words actually payable in the context of the amount of duty of excise, sales tax and other taxes would normally come into play only in those situations where the amount of excise, sales tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learance of goods the sales tax was payable under the deferment scheme and the question of making payment of any differential duty does not arise. 5.6 Learned senior counsel further submitted that Section 43B of the Income Tax Act, 1961 allows deduction from full amount of sales tax and not for the amount of NPV paid. CBDT vide Circular No.496 dated 25.8.1987 clarified that if the Sales Tax Act provides that the sales tax deferred under the scheme shall be treated as actually paid, then such a deeming provision will meet the requirements of section 43B. Consequently, the Government of Maharashtra have, by the Bombay Sales Tax (Amendment) Act, 1987, made the amendment accordingly and the statutory liability is treated to have been discharged for the purposes of section 43B of the Act. The aforesaid issue was also the subject matter of dispute and consideration in the case of Sulzer (India) Ltd. Vs. Jt. CIT reported in 2010-TIOL-670-ITAT-MUM-SB which has been upheld by the Hon ble Bombay High Court in Income Tax Appeal No. 450 of 2013. The said Judgment laid down the principle that the fact of payment of tax on NPV does not mean any benefit has been derived by the assessee. 5.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar reasons the judgment of the Hon ble Supreme Court passed in the case of Maruti Suzuki India Limited (supra) cannot be made applicable to the facts of the present case. In Maruti Suzuki India Limited (supra) the Hon ble Supreme Court dealt with the provisions of Haryana General Sales Tax Rules and held that the entitlement certificate granted to the assessee does not give any indication of deferment of Tax or capital subsidy and infact the same permitted the Assessee to retain the 50% Sales Tax Collected which was neither paid nor payable to the State Government. It was further submitted that without prejudice to the aforesaid, it can be seen that the judgement of Maruti (supra) is in favour of the Respondent, since it categorically held that 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. Ab initio, the facts of the two cases are different. In any event the Hon ble Supreme Court has not discussed the deferment scheme and the same is evident from the text of the order itself. 5.8 Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) E.L.T. 3 (S.C.) 7 is applicable to the facts of the present case. Additional consideration should flow directly or indirectly from the buyer to the seller. The interest earned, on deferred sales tax, by the manufacturer is not a benefit extended by the buyer to the seller but is an incentive, accruing in pursuance of State Government policy. Therefore, this amount cannot be treated as additional consideration . 5.11 Learned senior counsel lastly submitted that the matter ought to be remanded back to the Commissioner to decide the issue of limitation as the same was not decided by him, as he held in favour of respondent on merit itself. 6. Appeal No. E/85251/14 Bhushan Steel Ltd. Ms. Padmavati Patil appeared on behalf of this respondent assessee. The learned counsel made the submissions which were broadly in line with what was submitted by the learned senior counsel, Shri V.S. Nankani. The learned counsel explained why the judgment of the Hon ble Supreme Court in the case of Super Synotex reported in 2014 (301) ELT 273 (SC) is not applicable to the facts and circumstances of the case and how various clarifications issued by the Board from 1998 to 2002 on the subject as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded from the transaction value, has specifically been considered and dealt with by the Hon ble Apex Court in the case of CCE v Maruti Udyog Ltd reported in 2014 (307) ELT 625 (SC). A perusal of the said decision would make it clear that even as per the Revenue, in a case of deferment, deduction was available in respect of the deferred sales tax from the transaction value. In support of the said contention, attention was drawn to the issue which was framed for decision of the Hon ble Apex Court, i.e. Whether the CESTAT was right in holding that the High Powered Committee constituted under the provision of Rule 28C of the Haryana General Sales Tax Rules, 1975 merely deferred the payment of sales tax by Maruti and had not granted it any tax concession. The Hon ble Apex Court referred to the provisions of Rule 28C which applied both to Section 13B as also Section 25A of the relevant sales tax Act. While Section 13B dealt with grant of exemption. Section 25A on the other hand provided for that if the state government was satisfied, it may defer the payment of tax for such class of industries, for such period, either prospectively or retrospectively, and subject to such conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount 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. The relevant paragraphs of the circular, namely, paragraphs 10 and 11 read as follows :- 10. As regards exclusion of taxes while working out assessable value, the definition of transaction value itself mentions that whatever amount is actually paid or actually payable to the Government or the relevant statutory authority by way of excise, sale tax and other taxes, such amount shall be excluded from the transaction value. In other words, if any excise duty or other tax is paid at a concessional rate for a particular transaction, the amount of excise duty or tax actually paid at the concessional rate shall only be allowed to be deducted from price. The assessee cannot claim that the excise duty or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is of the opinion that it is necessary so to do in public interest, it may by Notification in the official gazette exempt, fully or partially, from the tax, the sale or purchase of any goods or class of goods or any person or class of person, without any condition or with such condition as may be specified in the Notification. The said incentive scheme was in the nature of an exemption from the levy of sales tax. Thus, under the said sales tax incentive Scheme of 1989, exemption was granted from the levy of sales tax in excess of 25% of the sales tax leviable, and consequently the balance 75% of the sales tax in respect of certain industries was neither to be paid nor was it payable. (iv) It was submitted that the Hon ble Apex Court had in the case of Shree Rajasthan Syntex taken note of this fact, while recording the facts in the following terms: the Respondent herein are engaged in the manufacture of yarn and waste of manmade fiber. It was availing sales tax exemption under the sales tax incentive scheme of 1989 on the yarn and waste, as issued by the State of Rajasthan. Under this incentive scheme, thought the Respondent was collecting the full incidence of sales tax fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that not only was the amount of sales tax in respect of which deduction has been claimed actually payable, but also by virtue of Section 94(2) of the MVAT Act, 2002, it was also actually paid. (ix) It was further submitted that payment on the NPV basis did not have the effect of altering the actual sales tax payable, or for that matter what was actually paid, and that if the stand taken by the Revenue was taken to its logical conclusion, it would result in the entire machinery provision of Section 4 of the Central Excise Act, 1944 being rendered unworkable, as then, in no case of a unit working on a deferral scheme, could the transaction value ever be determined, as only after the sales tax liability is actually paid after 15-20 years, depending upon the scheme, would the assessable value crystallize. This is clearly impermissible and would result in the entire provision for computation of the assessable value becoming unworkable and redundant. It is settled law that when the machinery provision fails, tax cannot be levied and that the only way to harmonize the machinery provision is to imply that the legislature never intended to tax or cover such a situation. Reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the apex court in the case of Super Synotex (India) Ltd. (supra) is distinguishable from the facts of the present case. Learned counsel also referred to Section 43B of the Income Tax Act, 1961 and the position there. He also referred to the decision in the case of CIT vs. Suzler (India) Ltd. which has been upheld by the Hon ble Bombay High Court. The Tribunal s decision in the case of Jayaswal Neco Industries vide order No. 52257-52258 dated 7.5.2014 was referred. It was also submitted that no penalty is imposable in the facts and circumstances of the case and similarly no interest can be levied under Section 11AA of the Act. 9. Appeal No. E/85201/13 Essel Propack Ltd. Learned senior advocate, Shri V. Sridharan appeared on behalf of the above appellant and made the following submissions:- (i) Explanation to Section 4(1) of the Central Excise Act, 1944 added by Finance Act, 2003 has no bearing on the issue involved in the present matter. (ii) Section 4 as introduced in 1944 and Section 4 as amended by Finance Act, 1955 did not provide for exclusion of sales tax. Still, the Board Circular clarified that no excise duty is payable on sales tax element. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract Act 1872 - principle of accord and satisfaction - whole Debt stands discharged. If creditor accepts lesser sum of money from the debtor, debt payable to creditor continues to be same sum. Debt is not wiped out. It is only unenforceable. Provisions of Contract Act are in nature of general principles of law, hence the same will apply to all the taxing statutes. (xv) No suppression by the appellants in the present matter Declarations duly filed by the appellants as required under Rule 173C of the Central Excise Rules, 1944. (xvi) Disintegration of the definition of transaction value into various portions will show that entire definition including the last leg deals with money flowing from buyer to seller only. (xvii) The last portion of the definition of transaction value deals non-inclusion clause . The last portion provides for non-inclusion of sales tax, excise duty or other taxes from the price actually paid or payable by the buyer to the seller in relation to sale of goods from the transaction value. Obviously, the last portion of the transaction value providing for non-inclusion of sales tax, excise duty or other taxes actually paid or payable by the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le making exclusions therein only excluded ` amount of sales tax actually paid or actually payable . Hence, even in case taxes are payable at the time of removal of goods, deduction thereof from the transaction value is allowable only if: the amount payable by buyer as sales tax, or charged from buyer as sales tax, or charged from buyer to make a provision for payment of sales tax is actually paid as sales tax. The term `actually paid or actually payable mandates that the amount allowed as deduction on account of tax should be an amount which is really/in fact payable and is actually paid up. (iv) Regarding the claim of the appellants that Section 38 of the Bombay Sales Tax Act, 1959 (Section 94 of the MVAT Act 2002) and similar provisions provide that in case the Sales Tax payable, which is deferred, is partially paid under the Package Scheme of Incentives, it shall be deemed to be full discharge of the Sales Tax liability and hence, the Sales tax should be deemed to have been actually paid, learned Commissioner (AR) submitted that a non obstante clause or a deeming provision in the State Act is applicable to and useful only for the purposes of the State Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. UOI 1997 (89) ELT 247 (SC) at para 68 held that The Central Excise Act 1944 is a comprehensive, self contained statute and provides for levy, assessment and collection of tax and all ancillary provisions. The provisions of the Contract Act, 1872 and other general laws shall not apply for its interpretation or enforcement or for other matters relating to Central Excise duty. (viii) The amount of money collected as tax by the assessee from his buyer, is a cost to the purchaser and the purpose and intention of Section 4 is to levy Central Excise duty on the entire cost to the purchaser. However, if the amount collected as tax is actually paid up as tax, only then is it excludible from the transaction value. Any amount collected as tax but not so paid up, forms part of the profit of the assessee and forms part of the assessable value as observed by Hon ble Supreme Court in para 22 and 23 of CCE Vs. Super Syncotex (I) Ltd. (supra). The Court has held that CBEC Circular dt. 12.3.1998 is not applicable to the period from 1.7.2000, after Section 4 was substituted. There is no relief from the rigour of actually paying the entire amount collected as Sales Tax to the sales tax autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards sales tax by the manufacturer. On a studied scrutiny of the scheme we have no scintilla of doubt that it is a pure and simple incentive scheme, regard being had to the language employed therein. In fact, by no stretch of imagination, it can be construed as a Scheme pertaining to exemption. Thus, analysed, though 25% of sales tax is paid to the State Government, the State Government instead of giving certain amount towards industrial incentive, grants incentive in the form of retention of 75% sales tax amount by the assessee. In a case of exemption, sales tax is neither collectable nor payable and if still an assessee collects any amount on the head of sales tax, that would become the price of the goods. Therefore, an incentive scheme of the present nature has to be treated on a different footing because the sales tax is collected and a part of it is retained by the assessee towards incentive which is subject to assessment under the local sales tax law and, as a matter of fact, assessments have been accordingly framed. In this factual backdrop, it has to be held that circular entitles an assessee to claim deduction towards sales tax from the assessable value. 20. The ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E 2007 (218) ELT 8(SC) (2) CCE Vs. Sujata Textile Mills Ltd. 2005 (181) ELT 379 (SC). (xiii) It has been submitted by the Appellant that in case the amount of Sales Tax is shown separately in the invoice then such amount does not form part of the price and hence the question of its exclusion or inclusion in the assessable value does not arise. Reliance has been placed on the decision in Anand Swarup 1980 (4) SCC 451 (SC) and other judgements. Learned Commissioner (AR) submitted that in all the decisions pertaining to Central Excise enumerated above, the Supreme Court has clearly laid down with respect to Sales Tax, Central Sales Tax and Turnover Tax, that they are part of the consideration received by the manufacturer, from the buyer for sale of goods, and shall form part of the assessable value for levying Central Excise duty, in case they are not actually paid to the concerned Tax Authority. Moreover, the decision in Anand Swarup s case has been distinguished by a Constitution Bench of the Supreme Court in the case of McDowell and Co. Ltd. Vs. CTO AIR 1986 SC 649. The definition of the term `turnover in the Andhra Pradesh General Sales Tax Act, 1957, considered in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once such loan is raised by SICOM. The payment at NPV is the repayment of the loan and not of the deferred tax because the tax is already deemed to have been paid. It may be appreciated that in the case of Super Syncotex (supra) a similar situation existed. The assesse could collect the amount of tax but pay only 25% of it to the State Government under the Incentive Scheme. The CESTAT allowed their appeal relying on para 4 of CBEC Circular dt. 12.3.1998 wherein it was said that in case, the tax collected and retained by the assesse, is accounted and adjusted as a cash incentive by the State to the assessee in the accounts of the State then the entire amount of tax collected is deductible from the price to arrive at the assessable value. The Supreme Court held that such deduction is allowable only uptil 1.7.2000 and not after it. This is because such adjustment is not allowable under the amended Section 4 and the entire amount of Sales Tax collected should be actually paid.(para 16 to 19,23 and 26 of CCE Vs. Super Syncotex (India) Ltd. (supra). (xvi) The decision of the Supreme Court in the case of CCE Vs. Maruti Suzuki India Ltd. 2014 (307) E.L.T. 625 (S.C.) pertains to deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have mentioned the `Value of goods after deducting the entire amount collected as sales tax/ not included the entire amount collected as sales tax. They have not mentioned the amounts collected as sales tax. They have not informed the Department about the deductions made towards sales tax/ the amounts collected as sales tax. They have not informed the Department about the retention of amounts collected as sales tax but not paid to the sales tax authority. (xx) The Hon ble Supreme Court has in the following cases, upheld the demands for extended period in identical/similar cases. Remand, if any, is only for the purpose of excluding the demands for the period prior to 1.7.2000 and for the purpose of computation of penalty after reworking out of the demand post 1.7.2000: CCE Vs. Super Syncotex(India) Ltd. 2014 (301) ELT 273(SC). CCE Vs Shree Rajasthan Syntex 2015 (318) ELT 626 (SC) Maruti Suzuki Ind 2014 (307) ELT 625 (SC) Modipon Fiber Co. Vs. CCE 2007 (218) ELT 8(SC) CCE Vs Pepsi Foods (2007) 213 ELT 321(SC) CCE Vs National Engg. Industries Ltd. 2015 TIOL 108-SC-CX (xxi) In the case of Bharat Roll Industries 2008 (229) ELT 107 (T), the CESTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns that the assessee is collecting more Sales Tax than actually paid. At the time and place of removal of goods there was no levy or assessment by the Department. The assessee assessed the duty after claiming deduction of Sales Tax at the rate prevalent and stating on the invoice (not submitted to the Department) that such amount is/ shall be actually paid. Hence, as per the assessees averment there was no short levy or non levy or short payment or non payment of Central Excise duty at that instant. The liability to pay duty arose at the point in time when it was found that they had not actually paid the amount collected and claimed as deduction on account of Sales Tax. In such cases, the provisions of Section 11A do not apply and demands can be made of the amount of Central Excise duty not paid. Reliance is placed on he following decisions of CESTAT, High Court and Supreme Court : CCE Vs Smithkine Beecham Consumer Health Care Ltd. 2003 (151) ELT 5(SC) Bombay Hospital Trust Vs CC 2005 (188) ELT 374 (T-LB)/ Upheld 2006 (201) ELT 555 (Bom) And Civil Appeal no. 1397/2008 dismissed as reported at 2015 (315) ELT A 26 (SC) 11. One of the contentions of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 25/- will be paid to the Government. The question was whether ₹ 75/- will form part of the transaction value or not. The issue in all the appeals here is not this but a different. Here the issue involved is that the manufacturer assessees were required to collect certain amount as sales tax which was collected by them. The said amount of sales tax was to be paid after a specified period say 11 to 15 years and in the meantime, was allowed to be retained by the law with the assessees. In 2002, the law was amended by which it became optional for the manufacturer assessees to pay the amount either at the end of stipulated period or at any point of time earlier on the basis of net present value (on the date of prepayment) of the amount of sales tax to be paid at the end of deferral period. We also note that there is no discussion about such a scheme in the Super Synotex judgment of the Hon ble Supreme Court. The obvious conclusion is that none of the parties who were appearing before the Hon ble Supreme Court pointed out to the Hon ble Supreme Court that the issue involved in other appeals is different. It also appears to us that none of such affected appellants/respondents have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that it is not the sales tax collected that is excludible but it is the sales tax actually paid or actually payable to the State Government that can be excluded. We therefore agree with the submissions of the learned senior counsel Shri V.S. Nankani as also all other counsels and do not find substance in the submission made by the learned Commissioner (AR) that issue is already decided by Hon ble Supreme Court in the case of Super Synotex. 16.0 While coming to the above conclusion, we note that the Hon ble Supreme Court in the case of CC(Port), Chennai vs. Toyota Kirloskar Motor (Pvt.) Ltd. reported in 2007 (213) ELT 4 (SC), has observed as under:- 30. The observations made by this Court Essar Gujarat Limited (supra) in Paragraph 18 must be understood in the factual matrix involved therein. The ratio of a decision, as is well-known, must be culled out from the facts involved in a given case. A decision, as is well-known, is an authority for what it decides and not what can logically be deduced therefrom. Even in Essar Gujarat Limited (supra), a clear distinction has been made between the charges required to be made for pre-importation and post-importation. All charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee what were the facts in the case in which the decision was given and what was the point which had to be decided. No judgment can be read as if it is a statute. A word or a clause or a sentence in the judgment cannot be regarded as a full exposition of law. Law cannot afford to be static and, therefore, Judges are to employ an intelligent technique in the use of precedents. 22. The said decision has recently been followed by a . learned Judge of the Patna High Court in Union of India v. Kashinath Mahto, AIR 1998 Patna 100. 23. Yet again, a Division Bench of this Court, in Jaya Sen v. Sujit Kumar Sarkar, AIR 1998 Calcutta 288, of which I was a member, inter alia, held as under : 27. It is now well known that a decision is an authority for what it decides and not what can logically be deduced therefrom. It is also well known that even a slight distinction in fact or an additional fact may make a lot of difference in decision making process. See Quinn v. Lealham (1900-1903) AER (Rep) 1, Krishna Kumar v. Union of India, 1990 (4) SCC 207: (AIR 1990 SC 1782), Commissioner of Income-tax v. Sun Engineering Co. Ltd. reported in AIR 1993 SC 43: (1993 Tax LR 58), Regional Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reserved judgment of Russell L.J. as if it were an Act of Parliament. And, in Herrington v. British Railways Board [1972 (2) WLR 537] Lord Morris said : There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case. 13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 14.The following words of Lord Denning in the matter of applying precedents have become locus classicus : Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. *** *** *** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was introduced is as under:- 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 the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum-duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods. A reading of the said Explanation would indicate that price-cum-duty of the excisable goods shall be the price actually paid to the assessee for the goods sold (we are leaving the part relating to money value of additional consideration as that is not relevant to the present dispute) and such price-cum-duty excluding sales tax and other taxes, if any, actually paid shall be deemed to include the duty payable on such goods. While we agree with the learned senior counsel s detailed description of circumstances under which the Explanation was added, but we are not agreeable to the contention that the application of the Explanation has to be limited to the examples qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax as a separate and distinct item in the invoice issued by them and hence cannot be even considered as price. Here again, the fact that sales tax is being shown separately in the invoices as a distinct item does not imply that a manufacturer or an assessee can collect any amount and that amount cannot be part of the assessable value. Collection of sales tax is one aspect and the amount actually paid or actually payable is different aspect. The law does not provide exclusion for the amount collected. It provides the exclusion for the sales tax and other taxes actually paid or actually payable. In view of the said position, the fact that the assessee has shown and collected sales tax as a separate and distinct item in the invoices is of no consequence in determining the assessable value and hence excise duty liability. The learned senior counsel has also submitted that sales tax collected by the assessee from purchaser is not even part of sales price and in support of that, he has quoted the Hon ble Supreme Court s judgment in the case of George Oakes Pvt. Ltd. reported in 1961 (12) STC 476 (SC). We are not impressed with this argument. The said judgment of the Hon ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he collection of sales tax but sales tax actually paid or payable is the criteria. In view of the said position, the decisions mentioned by the learned senior counsel are not applicable for the purpose of Central Excise law. The learned senior counsel also submitted that in the case of Bata India Ltd. reported in 1965 (53) STC 132 (Bom.), it has been held that under the Bombay Sales Tax Act, registered dealer is authorised to collect tax from purchaser and hence it is not part of price. In fact, similar notification exists in excise. Even in excise, excise duty is not considered as part of transaction value or price or even for computing the turnover, say for SSI purpose. As mentioned earlier, every law has its own purpose and its own definition. When the Central Excise law very clearly states that sales tax actually paid or payable only is required to be excluded, the case law mentioned will not be applicable for the purpose of Section 4 of the Central Excise Act. We therefore dismiss the contention of the senior counsel. 21. Another submission of the learned senior counsel was that the assessees are registered dealer under the relevant provisions of the Sales Tax law. It has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to eligible units registered under the Bombay Sales Tax Act is qua unit and not qua goods. Benefits given are to units satisfying the criteria specified by the Government from time to time, however, such benefits are for the goods produced or manufactured in such unit. Thus the benefit is finally with reference to goods manufactured by a unit satisfying the eligibility entitlement criteria. The excise duty is with reference to the goods and as per the law, one has to see how much sales tax is actually paid or payable by the manufacturer to the Sales Tax authorities. This contention of the senior counsel is therefore rejected. 23. Another submission of the learned senior counsel was that there is no machinery in the Central Excise Act including Section 11A of the Central Excise Act, 1944 to cover situation in the present case. We are not impressed with this argument of the learned senior counsel. The Central Excise Act/Rules provides scheme of provisional assessment which is a definite machinery where assessment for any reason cannot be finally made at the time of clearance. In case a manufacturer is not resorting to the provisional assessement, it is his bounden duty to suo mot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for purpose of determining the transaction value excludes only the excise duty, sales tax and other taxes, if any, actually paid or payable on such goods. Thus the money flowing from buyer to seller is total amount which includes all taxes. It is different matter that taxes are to be paid by seller to various authorities. In any case, for computing transaction value exclusion is only of the sales tax actually paid or actually payable on such goods. Thus this submission is rejected. 27. Another submission was that the amount of sales tax collected by the assessee under the Bombay Sales Tax Act from the buyer could not be part of the price for arriving at the transaction value under the Central Excise Act. We have already discussed this issue earlier also. The Central Excise Act does not provide that the amount of sales tax collected by the assessee will not form part of the price for arriving at the transaction value but the definition of the transaction value excludes the sales tax actually paid or payable. Exclusion is not with reference to collection but with reference to actually paid or actually payable. This contention is also rejected. 28. Another submission made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers; (ia) where the price at which such goods are ordinarily sold by the assessee is different for different places of removal, each such price shall, subject to the existence of other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such place of removal; (ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in clause (iii) of this proviso, the price or the maximum price, as the case may be, so fixed, shall, in relation to the goods so sold, be deemed to be the normal price thereof; (iii) where the assessee so arranges that the goods are generally not sold by him in the course of wholesale trade excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any and relative have the same meanings as in the Companies Act,1956 (1 of 1956); (d) value , in relation to any excisable goods,- i. where the goods are delivered at the time of removal in a packed condition, includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. Explanation. In this sub-clause, packing means the wrapper, container, bobbin, pirn, spool, reel or warp beam or any other thing in which or on which the excisable goods are wrapped, contained or wound; ii. does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale. Explanation. For the purposes of this sub-clause, the amount of the duty of excise payable on any excisable goods shall be the sum total of - a. the effective duty of excise payable on such goods under this Act; and b. the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes, if any, actually paid, shall be deemed to include the duty payable on such goods. (2) The provisions of this section shall not apply in respect of any excisable goods for which a tariff value has been fixed under sub-section (2) of section 3. (3) For the purpose of this section,- (a) assessee means the person who is liable to pay the duty of excise under this Act and includes his agent; (b) persons shall be deemed to be related if - (i) they are inter-connected undertakings; (ii) they are relatives; (iii) amongst them the buyer is a relative and a distributor of the assessee, or a sub-distributor of such distributor; or (iv) they are so associated that they have interest, directly or indirectly, in the business of each other. Explanation. In this clause - (i) inter-connected undertakings shall have the meaning assigned to it in clause (g) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969); and (ii) relative shall have the meaning assigned to it in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956); (c) place of removal means (i) a factory or any other place or prem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , actually paid or actually payable on such goods. Thus under old section, sales tax payable was to be excluded while under new section sales tax actually paid or actually payable to be excluded. But both the normal value and the transaction value are at the time of removal. A combined reading of the definition of time of removal, place of removal and normal value or transaction value would indicate that the normal value or transaction value is required to be determined keeping in view the situation/factors prevailing at the time and place of removal. 36. The Hon ble Supreme Court in the case of Purolator India Ltd. vs. CCE, Delhi-III reported in 2015-TIOL-193-SC-CX, has examined the concept of time and place of removal in Section 4 of the Central Excise Act. In the said case in para 18, 23 and 24, the Hon ble Supreme Court has observed as under:- 18. It can be seen that Section 4 as amended introduces the concept of transaction value so that on each removal of excisable goods, the transaction value of such goods becomes determinable. Whereas previously, the value of such excisable goods was the price at which such goods were ordinarily sold in the course of wholesale trade, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be deducted post Section 4 as amended in 2000. This Court said :- It is evincible from the language employed in the aforesaid circular that set off is to be taken into account for calculating the amount of sales tax permissible for arriving at the transaction value under Section 4 of the Act because the set off does not change the rate of sales tax payable/chargeable, but a lower amount is in fact paid due to set off of the sales tax paid on the input. Thus, if sales tax was not paid on the input, full amount is payable and has to be excluded for arriving at the transaction value . That is not the factual matrix in the present case. The assessee in the present case has paid only 25% and retained 75% of the amount which was collected as sales tax. 75% of the amount collected was retained and became the profit or the effective cost paid to the assessee by the purchaser. The amount payable as sales tax was only 25% of the normal sales tax. Purpose and objective in defining transaction value or value in relation to excisable goods is obvious. The price or cost paid to the manufacturer constitutes the assessable value on which excise duty is payable. It is also obvious that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the first part of the definition of transaction value which has to be read with Section 4(1)(a) as has been stated above. It will thus be seen even the Hon ble Supreme Court has discussed the case of Super Synotex in the above mentioned case and has observed that the time and place of removal is an important criteria while determining the transaction value and time and place of removal was not discussed in the case of Super Synotex as in that case that was not a material factor and everything was known and happening at the time of removal. Hon ble Supreme Court has also observed that in Super Synotex case, the Court was concerned with actually paid and not actually payable. 37. Thus one has to first of all examine what is the overall price of the goods which is actually paid or payable for the goods by the buyer and exclude from it excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. Thus to determine the transaction value for purpose of excise duty, one will have to find out the price actually paid or payable for the goods as also the sales tax which is actually paid or actually payable on such goods. In the situation in ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of incentive equivalent to sales tax payable by the units. 2. The matter regarding the above three situations has been examined by the Board in consultation with Ministry of Law. 3. In. category of cases mentioned in Para 1(i) sales tax is not deductible as no sales tax is payable by the assessee in accordance with the Law. 4. In situation (ii), Sales tax is payable by the assessee after a particular period. In situation (iii), the manufacturer collects the sales tax from the buyers and retains the same with him instead of paying it to the State Govt. The State Govt. on the other hand grants a cash incentive equivalent to the amount of sales tax payable and instead of the cash incentive being paid to the manufacturer, is credited to State Govt. account as payment towards sales tax by the manufacturer. In such a situation sales tax is also considered payable by the assessee within the meaning of the provisions of Section 4(4) (d)(ii) of the Central Excise Act, 1944. Therefore, sales tax is deductible from the wholesale price for determination of assessable value for levy of Central Excise Duty in category of cases mentioned in Para 1(ii) (iii) above. 5. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. Thus amount of sales tax which is actually payable under the deferment scheme will be excluded for determining the transaction value. 38.2 We also note that since the assessees who are working under the deferment scheme use the sales tax collected over a long period of time and thus get financially benefited in the above scheme as no interest on such amount is payable by them, the matter was again examined by the Board and the Board vide circular No.679/70/2002-CX dated 4.12.2002, clarified the matter as under:- Subject: Inclusion of interest on sales tax in the assessable value. I am directed to refer to Board s Circular No. 378/11/98-CX., dated 12-3-98 [1998 (99) E.L.T. T5] wherein it has been clarified that in situation where deferment of payment of Sales tax for particular period is allowed by State Government as incentive, Sales tax is deductible from the wholesale price for determination of assessable value for levy of Central Excise duty even though it may not be deposited immediately with the State Government. (2) Doubts have been raised as to whether in such cases, where sales tax is retained by the assessee, the interest on the money retained, shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate has been granted for availing of the incentives by way of deferment of sales tax, purchase tax, additional tax, turnover tax, or surcharge, as the case may be, may, in respect of any of the periods during which the said certificate is valid, at its option, prematurely pay in place of the amount of tax deferred by it an amount, equal to the net present value of the deferred tax as may be prescribed, and on making such payments, in the public interest, the deferred tax shall be deemed to have been paid. It will be thus seen that the said section provides for prepayment of the sales tax on net present value and on payment of net present value, it is deemed that the whole of the sales tax amount payable is paid. Thus as far as the Sales Tax Act authorities are concerned, whole of the deferred sales tax amount payable has been paid by the assessee/dealer. The fact that the said amount has been paid after the clearances of the goods and before the deferred date of payment, to our view will not make any difference. Further, the actual amount paid is equal to NPV (which is less than originally payable), cannot make the amount actually payable at the time and place of removal di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance, the term actually payable was relevant and not actually paid . Further, the amount of actually payable sales tax has not been varied by the Sales Tax Authorities. In view of the said factual matrix in the present cases, in our considered view, the Explanation does not help the cause of the Revenue and the contention is therefore rejected. 41. One of the contentions raised by the learned counsel, Shri Vipin Jain, was relating to the Hon ble Supreme Court judgment in the case of Maruti Udyog Ltd. (supra). The learned counsel has tried to argue that the said judgment is authentic declaration by the Hon ble Supreme Court that in the case of deferral scheme, the same will not be includible in the transaction value. We have gone through the said judgment of the Hon ble Supreme Court. What the Hon ble Supreme Court has come to the conclusion in the said case was that the Haryana Sales Tax scheme relating to prestigious unit in that case was considered by the Tribunal as a deferral scheme while the scheme was not a deferral scheme. The Hon ble Supreme Court was not dealing with the issue whether in the case of deferral of sales tax, the same will be excludible in the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives offered to entrepreneurs setting up industries in backward areas. Under these schemes, eligible units are permitted to collect sales tax and retain such tax for a prescribed period. After this period, the sales tax is to be paid to the Government either in lump sum or in instalments. 2. Section 43B of the Income-tax Act, 1961, introduced by the Finance Act, 1983, with effect from 1-4-1984 provides, inter alia, that a deduction in respect of any sum payable by the assessee by way of tax or duty under any law for the time being in force shall be allowed from the income of the previous year in which such sum is actually paid irrespective of the previous year in which the liability to pay such sum was incurred. Since the introduction of this provision, the assessees who collect sales tax, but do not pay the amounts to the Government during the previous year, under the deferral schemes provided by the State Governments are not entitled to the benefit of deduction from their income. 3. Representations have been received from various State Governments and others that cases of deferred sales tax payments should be excluded from the purview of section 43B as the operation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Board s Circular No. 496, dated 25-9-1987 in effect though in a different form. Accordingly, the Board have decided that the amount of sales tax liability converted into loans may be allowed as deduction in the assessment for the previous year in which such conversion has been permitted by or under Government Orders. A perusal of the two circulars would indicate that the CBDT has clarified in consultation with the Ministry of Law that if the Sales Tax Act provides that the sales tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of Section 43B of the Income Tax Act. 43. There can be a view that since the retention period is very long say 10 to 15 years and the value of the money changes with time. Therefore, the sales tax payable at the time of clearance should be the net present value of the deferred sales tax payable at the time of clearance. In fact such a view cannot be brushed aside because in the normal trade or commerce while it is usual to make payments within a specified period of few weeks or few months and even for taxes like sales tax or excise duty, the period of payment may be one monthly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and upheld that the extended period of limitation would be invocable in the facts and circumstances of the case. Learned Commissioner (AR), on the other hand, has argued vehemently why the concept of limitation will not be applicable or even if it is applicable, the extended period of limitation would be applicable in all the cases. Normally, the question of extended period of limitation is mixed question of facts and law and depends more on the facts of each case. In the present set of cases, the facts are very clear and in view of this position, in our view, there is no need for sending the matter back to the Commissioner in first three appeals and in the remaining two appeals Commissioner has already given his findings. However, we are holding the matter in favour of the manufacturer-assessees on the merits of the case itself. We therefore do not consider it necessary to go into discussion and give our finding on the question of limitation or interest. 46. Both the sides have quoted large number of judgments in support of various propositions made by them. We have gone through these judgments and also the facts of these cases and relevant laws. Most of these judgments are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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