1. Application for amendment of cause title in Civil Appeal No. 4686 of 2004 is allowed. Amendment to be carried out forthwith.
2. All these appeals raise a common question and therefore are being disposed of by this common order. Under S.4(4)(d)(ii) of the Central Excises and Salt Act, 1994, the value is not to include the amount of duty of excise, sales tax and other taxes if any payable on goods. Under S.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-s.(3) of S.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.
3. The Tribunal has, in all these cases, held that so long as the tax is payable it can be deducted. We see no infirmity in this reasoning.
4. However, a clarification is sought from this Court as to whether ultimately the Department can ask for proof that the tax is actually paid. There is no dispute that the Department can always call for proof that the amount is actually paid. If it is later on found that the amount is not actually paid the Department can, after following the procedure prescribed, revalue the goods.
5. In some of the matters the Department has sought to disallow on the ground that the invoice did not show the element of turnover tax. In our view, this action on the part of the Department is not sustainable. The invoice would never show the element of turnover tax, since the same cannot be recovered from the customers.
6. All these appeals stand disposed of with the above clarifications.
7. There will be no order as to costs.
Commissioner Of Customs & Excise, Bangalore v. Sujata Textile Mills Ltd
Commissioner Of Customs & Excise, Bangalore v. Sujata Textile Mills Ltd
(Supreme Court Of India)
C. A. No. 1499 of 2000 with C. A. Nos. 2677 of 2000, 5003 of 2001, 5004 of 2001, 196 of 2002, 4320 of 2003, 4986 of 2004, 617 of 2005 | 03-03-2005
Advocate List
- For the Appellant K. Swami, Rupesh Kumar, T.A. Khan, P. Parameswaran, B. Krishna Prasad, Advocates. For the Respondents V. Balachandran, Alok Yadav, Rajesh Kumar, Nikhil Nayyar, Advocates.
Bench
- HON'BLE MR. JUSTICE S.N. VARIAVA
- HON'BLE DR. JUSTICE AR. LAKSHMANAN
- HON'BLE MR. JUSTICE S.H. KAPADIA
Eq Citations
- 2005 (181) ELT 379
- (2005) 3 SCC 789
- 2005 (3) SCALE 325
- LQ/SC/2005/307
Head Note
Excise — Valuation — Turnover tax — Deductibility of — Turnover tax is payable under Karnataka Sales Tax Act, 1957 — Department sought to disallow turnover tax on ground that invoice did not show element of turnover tax — Held, invoice would never show element of turnover tax since same cannot be recovered from customers — Department can always call for proof that amount is actually paid — If it is later found that amount is not actually paid, Department can after following procedure prescribed revalue goods — Central Excise Act, 1944, S. 44(d)(ii)
