Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Central Excises Act I 944 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Central Excises Act, 1944:S. 4(4)( d)(ii) and Explanation appended thereto - Yarn - Turnover tax - Deduction of - By virtue of Exemption Notification, rate of turnover tax for normal area sales was 2% and for backward area sales was 0.5% - Claim of deduction at 2% for entire clearance without mentioning two types of sales effected by it - Entitlement for - Held: Not entitled - Assessee entitled to deduction of only effective duty payable - Since exemption has been granted, exemption has to be deducted from ad valorem duty - Central Excises Rules, 1944 - Rule 173-C - Finance Act, 1982 - s.47.S. 11A - Demand of duty on clearance of Yarn - By virtue of Notification, rate of turnover tax for normal area sales was 2% and for backward area sales was 0.5% - Assessee claimed deduction at 2% for entire clearance - Demand for differential duty raised by department for period March 1994 to March 1997 - Extended period of limitation-Invocation of - Held: Invokable as assessee was guilty of suppression of two types of sales effected by it - However, since assessee intimated on 14.1.1997 about the two types of sales, Department cannot allege suppression after 14.1.1997 - Notification dated 19.10.1993.The appellant-assessee had been engaged in the manufacture of Nylon and Polyester Yarn in its factory in U.P. which is cleared to its various Depots situated all over India including Surat from where the Yarn is sold to dealers. In respect of yarn cleared and despatched to Surat depot, the assessee claimed deduction at 2% on account of Turnover Tax (TOT). This was on the footing that the Government of Gujarat vide Notification dated 19.10.1993 had exempted sale of Yarn of all kinds by a registered dealer to a special manufacturer of processed Yarn or to an eligible unit to the extent to which the rate of TOT exceeded 0.5% of the total turnover. The Revenue issued show cause notice dated 19.3.1999 on the ground that the assessee had suppressed the fact that during the period March 1994 to March 1997, there were two types of sales, one in the backward area as notified by the Gujarat Government and the other in areas other than the backward area; that the assessee had claimed deduction for TOT at the full rate of 2% in respect of entire clearances of Nylon Yarn sent to its Surat depot without mentioning that in the State of Gujarat on account of Notification dated 19.10.1993 two rates of TOT existed and, therefore, the assessee had claimed wrongfully the deduction at a higher rate of 2% as against the rate of 0.5%; that since the assessee had deducted TOT at a higher rate to arrive at the assessable value, it had lowered the assessable value to the extent of 1.5% and, as such, a demand for difference was made on the assessee. The demand was confirmed by the authorities. On appeal, the Tribunal confirmed the demand, however it found that demand was beyond limitation after the assessee had informed Department on 14.1.1997 that there were two types of sales and hence it was not open to Department to claim suppression after 14.1.1997. The assessee and Department both filed appeals against the order of Tribunal. |
Judge | Honble Mr. Justice S.H. Kapadia |
Neutral Citation | 2007 INSC 1104 |
Petitioner | M/s. Modipon Fibre Company, Modinagar, U.p. |
Respondent | Commissioner Of Central Excise, Meerut |
SCR | [2007] 11 S.C.R. 688 |
Judgement Date | 2007-10-25 |
Case Number | 2008-2010 |
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