1. Calculation of cess under Section 9, Industries (Development and Regulation) Act, 1951 — Dispute over whether excise duty and sales tax are included in the assessable value. (Para 1 )
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1999 Supreme(SC) 1291
SUPREME COURT OF INDIA
A.P.Misra : S.P.Bharucha
Collector Of Central Excise
Versus
Central Pulp Mills Limited
Case No. : 10506 of 1995
Date of Decision : 11/2/99
The "value" for computing cess under the Industries (Development and Regulation) Act is the wholesale cash price. Statutory exclusions of taxes found in the Central Excise Act do not automatically apply to other statutes unless expressly provided.
Headnote:(A) Industries (Development and Regulation) Act, 1951 - Section 9 - Central Excise Act - Section 4(4)(d) - Levy and collection of cess - Determination of "value" - Value defined as wholesale cash price for which goods are sold or capable of being sold for delivery at the place of manufacture - Whether excise duty and sales tax should be included in the assessable value for computing cess - If excise duty and sales tax ordinarily form a part of the wholesale cash price, they would form a part of the value, but not otherwise - Exclusion of taxes under Section 4(4)(d)(ii) of the Central Excise Act does not automatically apply to the assessment of duty under another statute. (Paras 1, 3)
Facts of the case:
A dispute arose regarding the quantum of cess to be levied under the Industries (Development and Regulation) Act, 1951. The Tribunal held that for calculating the cess, only the assessable value should be considered, and excise duty and sales tax should not be added. The Revenue appealed, arguing that since the Industries (Development and Regulation) Act lacks an express provision excluding these taxes, unlike the Central Excise Act, they should be included in the assessable value.
Findings of Court:
The contention that the absence of an express exclusion in the Industries (Development and Regulation) Act necessitates the inclusion of excise duty and sales tax is not sustainable. The value is determined by the wholesale cash price.
Issues: Whether excise duty and sales tax are to be included in the "value" for the purpose of computing cess under Section 9 of the Industries (Development and Regulation) Act, 1951.
Ratio Decidendi: The court ruled that the "value" for cess is the wholesale cash price. If taxes ordinarily form part of that price, they are included; otherwise, they are not. The specific statutory exclusion of taxes in the Central Excise Act cannot be used to infer a similar principle for another statute.
Result: Appeal fails and is dismissed.
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2. Revenue's contention — Absence of express exclusion of taxes in the Industries (Development and Regulation) Act implies that excise duty and sales tax should be included in assessable value. (Para 2 )
3. Determination of value based on wholesale cash price — Inclusion of taxes depends on whether they ordinarily form part of the price for delivery at the place of manufacture. (Para 3 )
4. Statutory exclusion of taxes under the Central Excise Act does not automatically extend to the determination of assessable value under other statutes. (Para 3 )
5. Appeal dismissed; no order as to costs. (Para 4 )
6. How is value determined for the purpose of levying cess under the Industries (Development and Regulation) Act, 1951?
Value is deemed to be the wholesale cash price for which goods of the like kind and quality are sold or capable of being sold for delivery at the place of manufacture and at the time of their removal therefrom. (Para 1 , 3 )
7. Should excise duty and sales tax be included in the assessable value for cess under the Industries (Development and Regulation) Act, 1951?
Excise duty and sales tax are included in the value of such goods if they ordinarily form a part of the wholesale cash price for which the goods are sold or capable of being sold. (Para 3 )
8. Does the exclusion of taxes under the Central Excise Act apply to the assessment of duty under other statutes?
No, the fact that the Central Excise Act expressly states that assessable value does not include excise duty, sales tax, and other taxes does not imply that the same principle must be applied to other statutes. (Para 3 )
S.P.BHARUCHA, J.
(1) THE question in this appeal relates to the quantum of cess to be levied under the provisions of the Industries (Development and Regulation) Act, 1951. Section 9 thereof states that there may be levied and collected as a cess for the purposes of the said Act, on all goods manufactured or produced in any such scheduled industry as may be specified in this behalf by the Central Government by notified order, a duty of excise at such rate as may be specified in the notified order. The expression "value" is explained in the section. Value shall in relation to any goods be deemed to be the wholesale cash price for which such goods of the like kind and quality are sold or are capable of being sold for delivery at the place of manufacture and at the time of their removal therefrom, without any abatement or deduction whatever except trade discount and the amount of duty then payable. The Tribunal, in the order under challenge, concluded that in calculating the quantum of the cess the assessable value alone had to be taken into account and excise duty and sales tax, paid or payable, were not to be added to the assessable value for computing the cess.
(2) THE Revenue, now in appeal, contends, on an analogy with Section 4(4)(d) of the Central Excise Act, that the Tribunal was in error. In learned counsels submission, "value" for the purposes of the assessment of duty under the Central Excise Act does not include excise duty, sales tax and other taxes only by virtue of the express provision in that behalf in Section 4(4)(d)(ii) and that, therefore, excise duty and sales tax are to be taken into account in arriving at the assessable value for the purposes of imposition of cess under the Industries (Development and Regulation) Act for, in that Act, no such express provision is made.
(3) WE are of the view that that contention, by itself, does not assist the Revenue. For the purposes of the cess under the Industries (Development and Regulation) Act, what has to be established is what is the wholesale cash price for which goods, of the kind and quality of the goods sought to be taxed, are sold or are capable of being sold, for delivery at the place of manufacture and at the time of their removal therefrom. If excise duty is (other than that under the said Act) and sales tax ordinarily form a part of such wholesale cash price, then they would form a part of the value of such goods but not otherwise. The fact that Section 4(4)(d)(ii) of the Central Excise Act states that the assessable value does not include the amount of excise duty, sales tax and other taxes does not, by itself, lead to the inference that for the purposes of assessment of duty of excise under another statute the same principle must be applied.
(4) THE appeal fails and is dismissed. No order as to costs.
