Custom, Excise & Service Tax Tribunal
M/S Hindustan Unilever Ltd vs The Commissioner Of Central Excise on 13 June, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH
BANGALORE
Appeal(s) Involved:
E/156/2008-DB
E/157/2008-DB
[Arising out of Order-in-Appeal No. 116/2007-CE & 115/2007-CE dated 10/12/2007 passed by Commissioner of Central Excise (Appeals), Cochin]
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
M/s Hindustan Unilever Ltd.,
Tatapuram,
Kochi
Appellant(s)
The Commissioner of Central Excise,
Cochin
Respondent(s)
Appearance:
Mr Sandeep Gopalakrishnan, Adv For the Appellant Mr N. Jagadish, A.R. For the Respondent Date of Hearing: 03/06/2016 Date of Decision:
CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER Final Order No. 20422-20423 / 2016 Per : S.S GARG The present appeals are directed against the impugned orders dated 10/12/2007 passed by Commissioner (Appeals) upholding the order-in-original and denying the benefit of abatement of Sales Tax/VAT on equalized basis. Since the issue in both the appeals is common and therefore both the appeals are disposed of by this common order. The facts of the present case are that the appellant is engaged in the manufacture of laundry soaps falling under Chapter heading No 3401.11, toilet soaps falling under Chapter Heading No 3401.19, crude glycerin falling under Chapter heading 1506.00 and distilled fatty acid falling under Chapter 3823.00 in the first Schedule to CETA at their factory at Kochi and they are clearing laundry soaps to their depots located in various parts of the country on payment of duty. The unit selling price of the product all over India is uniform. Consequent to introduction of Value Added Tax with effect from 01.04.2005, the rate of 12.5% VAT has been charged in some States and in other States sales tax at differing percentages is being charged. In view of this factual position, a show-cause notice dated 28.8.2006 was issued proposing to deny the claim for deduction of sales tax and other taxes in excess of 12.5% on the ground that the same is inadmissible deduction and accordingly on the difference in value, duty was demanded. The appellant controverted the allegation in the show-cause notice but the Assistant Commissioner through order-in-original No 6/2007 dated 09.04.2007 confirmed the demand and imposed penalty and thereafter the appellant filed appeal before Commissioner (Appeals) who vide order-in-appeal No. 116/2007-CE dated 10.12.2007 upheld the order-in-original and hence the present appeal.
2. The learned counsel for the appellant submits that the impugned order is not sustainable in law as the same is opposed to the provisions of law, judgements and CBEC instructions etc. on the issue. Learned counsel further submitted that there is no material change in the provisions of law i.e. under Section 4(4()(d)(ii) prior to 01.7.2000 and Section 4(3)(d) with effect from 01.07.2000, in so far as the claim of admissible deduction (sales tax/VAT in the instant case) on the basis of actual tax as long as the same does not exceed the amount paid to the State Exchequer. Learned counsel also submitted that once the sales tax is held to be an admissible deduction, it should be allowed even on equalized basis as the appellant has not claimed a single paisa more than what is actually paid to the Exchequer. He further submitted that paras 10 & 11 of CBEC instructions dated 30.06.2000 and CBEC Circular dated 01.07.2002 makes the matter clear that sales tax payable is an admissible deduction. In support of this claim, he cited some orders passed in his favour by various Tribunals and also by the Honble Supreme Court of India. He placed reliance on the following decisions:
1) Final Order No A/361-362/13/EB /C-II dated 16.4.2013
2) Final Order No A/1956/WZB/Mum/05/C-III/EB dated 25.08.2005
3) Final Order No. 40459-40460 dated 24.06.2-2014 and Honble Supreme Courts decision in the appellants own case in Civil Appeal D.No. 16121 of 2015 dated 28.08.2015.
3. On the other hand, learned A.R., reiterated the findings of the Commissioner (Appeals).
4. We have carefully heard the learned counsel for the Appellant and the learned A.R. for the Revenue and perused the records. After considering the submissions of both the sides, we find that both the lower authorities (of Revenue) below held that equalized or average sales tax cannot be allowed for abatement under Section 4 of the Central Excise Act 1944. Further, we find that this issue is no longer res integra in view of the various decisions of the Tribunal in the appellants own case cited supra and also the judgment of the Honble Supreme Court in the appellants own case cited (supra). For proper appreciation of the case, we may quote the relevant portion of the Final Order dated 24.06.2014 which is reproduced in the order of the Tribunal in the case of the appellant reported in 2015-TIOL-510-CESTAT MAD.
"4. It is seen that the Tribunal subsequently vide Final order No. A/361 & 362/13/EB/C-II dt. 16.4.2013 in the appellant's own case set aside the order and allowed the appeal. The relevant portion of the said decision is reproduced below:-
5. This issue came up before this Tribunal in appellant's own case wherein vide Order No.A/1956/WZB/Mum/05/C-III/EB dated 25.08.2005 this Tribunal held that the Equalised Sales Tax can be allowed to be deducted. This issue again came up before this Tribunal in the case of Dabur India ltd. 2009 (247) ELT 335 = 2009-TIOL-1148-CESTAT-DEL wherein this Tribunal observed as under:
7. We have carefully considered the submissions from both sides. There is no dispute about the eligibility for deduction on account of octroi and additional sales tax. The original authority has accepted this in principle. He has disallowed the deduction only based on the grounds that the Respondent have claimed the same on a weighted average basis as mentioned earlier. The Commissioner (Appeals) have allowed the deduction without specifically giving a finding on each of the above three grounds raised by the original authority. We are of the considered view that in the given facts and circumstances of the case, the deduction towards additional sales tax and octroi can be allowed on equalized basis as has been done in the case of Apollo Tyres Limited cited supra. However, we are in agreement with the submissions of the learned DR that the said expenses have to be segregated exclusively in respect of excisable goods cleared by the Respondent for the respective year. Therefore, to enable the same, we set aside the orders of the Commissioner (Appeals) and those of the original authority and remand the matter to the original authority to allow the deduction on the lines indicated above after granting reasonable opportunity of hearing to the party. The party shall produce relevant details within two months from the date of receipt of this Order and original authority shall dispose of the matter within four months thereafter.
6. Again this issue came up before this Tribunal in the case of Dabur India Ltd. - 2013-TIOL-125-CESTAT-DEL wherein also the same view was taken by this Tribunal.
7. Following the precedent decisions cited hereinabove of this Tribunal, which was accepted by the revenue, we do not have any hesitation to hold that the appellant are entitled to claim deduction of Equalized Sales Tax from the transaction value to arrive at the assessable value."
5. In view of the above discussion, we hold that the appellants are entitled to claim the abatement of equalized sales tax from the transaction value. Accordingly, both the impugned orders are set aside and both the appeals are allowed with consequential relief. Stay applications are disposed of."
4.1 The Revenue challenged the decision of CESTAT, Chennai before the Honble Supreme Court and the Honble Supreme Court vide its order dated 28.08.2015 has held as under:
Having gone through the records of the case and hearing the learned counsel for the parties to the lis, we are of the considered opinion that the appeals being devoid of merit deserves to be dismissed and are dismissed accordingly.
5. Considering above discussions and decision of the Honble Supreme Court in the appellants own case, we hold that the impugned orders are not sustainable in both the cases and are hereby set aside. The appeals are allowed with consequential relief, if any.
(Order pronounced in open court on )
ASHOK K. ARYA
TECHNICAL MEMBER
S.S GARG
JUDICIAL MEMBER
pnr
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