TMI Blog2023 (11) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... l) 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. In view of the decisions of the Tribunal, relating to the peculiarity of the scheme which was prevailed insofar as the impugned order is concerned, the demand is set aside - appeal allowed. - HON BLE MR C J MATHEW, MEMBER (TECHNICAL) And HON BLE MR AJAY SHARMA, MEMBER (JUDICIAL) Shri D H Nadkarni, Advocate and Ms Kranti Rathi, Advocate for the appellant Shri Xavier R Mascarenhas, Superintendent (AR) for the respondent ORDER PER : C J MATHEW The limited issue in this appeal of M/s Rational Engineers Pvt Ltd pertains to recovery of ₹ 7,16,470/- under section 11A of Central Excise Act, 1944 and imposition of penalty of like amount under section 11AC of Central Excise Act, 1944 in relation to the value of the goods cleared by them between 2000-01 and 2005-06. It would appear that the Government of Maharashtra had notified a pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et discounting term for measuring the time value of the money. In effect, what was foregone by the State Government was merely the cost incurred by the assessee for not awaiting the appropriate date of payment for discharge of tax liability. 5. A similar dispute had came up before the Tribunal in re Uttam Galva Steels Ltd and it was held 14. We have gone through the judgment of the Hon ble Supreme Court in the case of Super Synotex. A perusal of the order would indicate that what was being considered by the Hon ble Supreme Court was that when a part of the sales tax collected which was permitted to be retained by the manufacturer will form part of the transaction value for determination of excise duty or not. Thus the issue was that the law permits Rs. 100/- to be collected as sales tax which was collected by the manufacturer but law also provided that Rs. 75/- will be retained by the manufacturer and only Rs. 25/- will be paid to the Government. The question was whether Rs. 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 ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable is permissible to be deducted irrespective of the fact whether the sales tax was paid immediately or on a deferred basis and irrespective of the fact whether incentives were provided by the State Government towards sales tax in any manner. xxxxxx 5.7 A careful reading of the above legal provisions clearly indicates that much emphasis has been placed in the central excise law with regard to the concept of time and place of removal. The law very clearly provides that the value for the purposes of levy of excise duty has to be determined at the time and place of removal for delivery. So, while determining the value at the time and place of removal, the permissible deductions in arriving at the value are also required to be determined at that point of time. In other words, if sales tax is permitted to be abated while determining the assessable value, the deduction towards sales tax will be in respect of sales tax actually paid or actually payable at the time and place of removal of the goods. The word payable means to be paid or liable to be paid as per ordinary dictionary meaning. Liable to be paid means, liability in accordance with the law. Therefore, what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax liability under the sales tax deferral scheme and the provisions has been introduced in the law in public interest. It would be also relevant to note that the changes in sales tax law made in November 2002, did not alter the rate of sales tax payable nor provided any exemption from payment of sales tax. The only consequence was that it provided an option to the eligible assessee to discharge the deferred sales tax liability by paying its Net Present Value (NPV). It is relevant to note that the said provision did not, in any way, reduce the deferred sales tax liability or amount. What the law provided was that it gave an option to the assessee to discharge the deferred/future liability by paying its present value immediately. An assessee who has cleared the goods from 1992-1993 onwards could not have anticipated that ten years later the Government will introduce a law providing for discharge of duty liability on NPV basis. Therefore, in our view, the appellant cannot be saddled with a tax liability on account of changes in law, which took place several years after the clearance of the goods. xxxxx 5.9 The appellants have relied on a number of judicial pronouncement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of changes which take place subsequent to the clearance of the goods and the ratio of these judgments has a bearing on the issues involved in the present case. In Indo Hacks Ltd. v. CCE, Hyderabad, reported in 1986 (25) E.L.T. 69 (Tribunal), a three member Bench of this Tribunal considered the question whether subsequent reduction in prices after the clearance of the goods from the factory could impact the assessable value already determined. It was held that once the correct assessable value has been declared by the assessee and the goods cleared from the factory, any subsequent reduction in prices cannot be a matter of concern for the Central Excise in determining the correct assessable value or even for determining the valuation for the purpose of claiming exemption. In the case of MRF Ltd. v. CCE, Madras, reported in 1997 (92) E.L.T. 309 (S.C.), the Hon ble Apex Court held as follows : Once the assessee has cleared the goods on the classification and price indicated by him at the time of the removal of the goods from the factory gate, the assessee becomes liable to payment of duty on that date and time and subsequent reduction in prices for whatever reason cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various abatements permissible as provided for in the law, the question of re-determination of assessable value on account of changes that happened subsequent to the clearances, whether on account of changes in the law or otherwise will not be a cause for re-determination of assessable value. In the instant case, a certain amount of sales tax was payable under the sales tax laws when the goods was cleared from the factory and the same was a permissible reduction under the excise law. Much after the clearance of the goods, the sales tax laws were amended to provide for payment of net present value of the sales tax deferred in complete discharge of the sales tax liability. Such changes in sales tax liability on account of changes in sales tax law cannot be a cause for re-determination of the assessable value determined in accordance with the law of central excise as it stood at the time of removal of the goods. Applying the ratio of these judgments to the facts of the present case, we hold that the abatement towards sales tax has to be allowed in terms of the sales tax liability (as per law) at the time of clearance of the goods. Such abatement cannot be subsequently altered or res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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