Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Bpl Limited on 27 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/86/2004-DB [Arising out of Order-in-Appeal No. 387/2003 dated 31/12/2003 passed by the Commissioner of Central Excise, Bangalore-I (Appeals) ] For approval and signature: HON'BLE SHRI S.S GARG, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, C.R Buildings, Bangalore 560 001 Appellant(s) Versus BPL Limited 17 Km, Old Madras Road, Bangalore 560 049 Karnataka Respondent(s)
Appearance:
Shri J. Harish, AR For the Appellant None For the Respondent Date of Hearing: 27/09/2016 Date of Decision: 27/09/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER Final Order No. 20849 / 2016 Per: S.S GARG The present appeal has been filed by the department against the impugned order passed in appeal by the Commissioner (Appeals) vide Order dated 31.12.2003 vide which the Commissioner (Appeals) has rejected the departmental appeal and upheld the Order-in-Original. Briefly the facts of the present case are that the respondent is a manufacturer of excisable goods i.e. Colour Television receiver under Chapter 85 of CETA, 1985. They filed the price list for clearance of goods claiming certain deductions, abatements one of them being the discount on the turnover tax. The Deputy Commissioner Central Excise, Bangalore vide his Order-in-Original No. 02/2003 dated 21.01.2003 allowed the abatements claimed on account of non recoverable sales tax. Aggrieved by the Order-in-Original the department filed appeal before the Commissioner (Appeals) who vide his Order dated 31.12.2003 rejected the appeal of the department and upheld the Order-in-Original. Aggrieved by the same the present appeal has been filed by the Revenue.
2. Learned AR submitted that the impugned order is not sustainable in law as the learned Commissioner (Appeals) has failed to appreciate that Turnover Tax does not form part of the price as a component of tax, as it is not permitted to be collected from buyer of excisable goods, it has to be treated as overhead expense while working out of the cost of the product or the seller has to meet the same out of his profit resulting in the reduction in the profit margin. He further submitted that turnover tax merges with the other costs and it becomes an overhead expense and does not qualify for deduction under Section 4. He also submitted that the learned Commissioner (Appeals) failed to appreciate that as per the provisions of Section 18(3) read with Section 6(b) of the Karnataka Sales Act, 1957, the turnover tax could not form a part of the price/invoice price and as such the turnover tax could not be allowed.
3. None has appeared on behalf of the respondent.
4. We have considered the submission of AR and have gone through the record of the case and we find that the case can be decided in the absence of the respondent as the issue is no longer res integra in view of the judgments of the Honble Supreme Court in the case of Commissioner Vs. Sujata Textile Mills Ltd. 2005 (181) E.L.T. 379 (S.C) and CCE, Belgaum Vs. Akay Cosmetics Pvt. Ltd. 2005 (182) E.L.T. 294 (S.C). The Honble Supreme Court in the case of Sujata Textile Mills Ltd. has held that under Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944, the value is not to include the amount of duty of excise, sales tax and other taxes if any payable on goods. Under Section 18 of the Karnataka Sales Tax Act, 1957 a registered dealer has to pay a tax known as turnover tax and by virtue of sub-section (3) of Section 18 he is not permitted to pass on that tax to the customer. The question is whether at the time of working out valuation of the goods, under the Central Excises and Salt Act, 1944, the turnover tax can be deducted. To be remembered that at this stage it will not have been actually paid.
5. In view of the decision of the Honble Supreme Court, we hold that there is no merit in the appeal of the appellant-Revenue and the same is dismissed and the order of the Commissioner (Appeals) is upheld.
(Order pronounced in open court) (ASHOK K. ARYA) TECHNICAL MEMBER (S.S GARG) JUDICIAL MEMBER iss