Del. HC: Liquidated Damages Mentioned in Agreement Can’t be Awarded in Absence of Proof of Loss  ||  MP HC: S.375 Marital Sex Exemption Also Provides Exemption Under Section 377 of IPC  ||  SC: SARFAESI Doesn’t Give Any License to Bank Officers to Act Against the Scheme of Law  ||  All. HC: Court Can’t Mechanically Reject Application for Waiving Off Cooling Period u/s 13B of HMA  ||  Kar. HC: Acquittal Order Can’t be Put in Challenge by Stranger to the Case  ||  Kar. HC: Alternate Remedy Can’t be Used as China Wall Against Invocation of Writ Jurisdiction  ||  Bom. HC Upholds Constitutional Validity of Goa’s Green Cess Act  ||  Del. HC: Not Court’s Business to Demonstrate Morality of an Act unless it has Caused Harm  ||  Del. HC: Cost Accountants and Chartered Accountants Not Similarly Placed Under Law  ||  SC: No Party Ought to be Vexed Twice in a Litigation for One and the Same Cause    

Pioma Industries and Ors. Vs. C.C.E. & S.T.-Ahmedabad-III and Ors. - (Customs, Excise and Service Tax Appellate Tribunal) (15 May 2017)

Sale price realized by an Assessee be regarded as price inclusive of excise duty



In present case, Appellant was manufacturing un-branded Soft Drink Concentrates and were classifying said goods prior to April 2005 under six digit classification of Central Excise Tariff under Heading 2108.90 and were having benefit of Nil rate of duty as tariff rate was Nil. After introduction of eight digit classification for Central Excise, Appellant-Assessee classified subject goods under Tariff Sub Heading 21.06.9099 whereas Department decided to classify goods under Central Excise Tariff Sub Heading No. 2106.9019. Assessee-appellant after classifying subject goods under Tariff Heading 2106.9099, is claiming benefit of Notification No. 3/2005-CE: MANU/EXCT/0010/2005 for said goods. However, Departments stand is that, benefit of Notification No. 3/2005-CE : MANU/EXCT/0010/2005 is not available to subject goods as goods deserve classification under Tariff Sub Heading 2106.9019. Vide impugned orders, Department classified subject goods under Chapter sub-heading 2106.9019 of Central Excise Tariff without benefit of Notification No. 3/2005-CE : MANU/EXCT/0010/2005 and confirmed demand against Assessee-Appellant. Hence, present appeals before Tribunal.

Goods deserve classification under Central Excise Tariff sub-heading No. 2106.9019 as Others, which specifically covers Soft Drink Concentrates other than Sharbat, which is one of sub entries of description Soft Drink Concentrates. For Soft Drink Concentrates, there are only two sub headings one for Sharbat which is covered by Heading 2106.9011 and second one is Other category which is covered by Heading 2106.9019.

Thus, there are only two choices for classifying Soft Drink Concentrates which could be either Sharbat or could be others. In light of descriptions and wordings of Central Excise Tariff, it is clear that, there cannot be two opinions regarding classification of item Soft Drink Concentrates (unbranded) and, therefore, its correct classification is 2106.9019 only. Assessee is pleading classification of their goods under Central Excise Tariff Sub Heading 2106.9099 for which there is no basis.

In light of Indirect Tax Scheme/Structures of Union of India, where duty of Central Excise is levied on manufacturing and set off for taxes paid on inputs (raw materials/services) used for manufacturing a product is generally allowed (unless there is contrary provisions to such effect), Appellant would be entitled to claim benefit of MODVAT/CENVAT Credit for inputs utilized for manufacturing subject goods.

In present case, goods have already been sold to customers and there is no likelihood of further recovery from past consumers of any duty of Central Excise, if levied and confirmed against Appellant now. Supreme Court in case of CCE Delhi Vs. Maruti Udyog Ltd. has held that, sale price realized by an assessee should be regarded as price inclusive of excise duty as purchaser has no obligation to pay any amount in excess of what has already been paid as price for goods purchased.

In light of discussion and observations of Apex Court, Appellant is entitled to cum duty benefit for sales made during period under dispute and liability of duty of Central Excise against them is to be computed accordingly, for which matter is being remanded to Adjudicating authority viz. jurisdictional Commissioner of Central Excise. Appellant is entitled to benefit of MODVAT/CENVAT Credit, when they make payment of their liability of Central Excise duty to Department.

Impugned order is modified and matter is accordingly remanded to Adjudicating authority viz. Commissioner Incharge for re-quantification of liability of duty of Central Excise against appellant, and he shall adjudicate the same after giving opportunity of personal hearing and submission of documents to Appellant.

Relevant : CCE Delhi Vs. Maruti Udyog Ltd. MANU/SC/0148/2002 : 2002 (141) ELT 3 (SC)


Share :        

Disclaimer | Copyright 2023 - All Rights Reserved