NDLI: Maruti Suzuki India Ltd. Vs. Commissioner of Income Tax, Delhi

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act 1961 Automobiles
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Central Excise Act, 1944 (1 of 1944) Income Tax Act, 1961 (43 of 1961)
Case(s) Referred	Referred Case 0 Referred Case 1
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Income Tax Act, 1961 – Proviso to s.43B – Allowable deduction u/s.43B in respect of unutilised MODVAT credit – Appellant-assessee manufactures automobiles chargeable to Excise Duty under the 1944 Act– It acquires excisable raw materials & inputs, which are used in manufacturing of vehicles, on which it was also taking benefit of MODVAT credit – At the end of assessment year 1999-2000, Rs.69,93,00,428/- was left as unutilised MODVAT credit – Assessee claimed deduction u/s.43B and also claimed deduction of Rs.3,08,88,171/- in respect of Sales Tax Recoverable Account – Assessing Officer disallowed both claims of deductions – Upheld by Commissioner of Income Tax & ITAT – High Court answered questions relating to the aforesaid disallowance in favour of Revenue – Held: Under s.43B(a), deduction is allowed on “any sum payable by the assessee by way of tax, duty, cess or fee” – Credit of Excise Duty earned by appellant under MODVAT scheme as per 1944 Rules is not sum payable by the assessee by way of tax, duty, cess – Scheme u/s.43B is to allow deduction when a sum is payable by assessee by way of tax, duty & cess and had been actually paid by him – Excise Duty leviable on appellant on manufacture of vehicles was already adjusted in the concerned assessment year from the credit of Excise Duty under MODVAT scheme – Unutilised credit in the MODVAT scheme cannot be treated as sum actually paid by appellant – Assessee when pays the cost of raw materials where the duty is embedded, it does not ipso facto mean that assessee is the one who is liable to pay Excise Duty on such raw material/inputs – It is merely the incident of Excise Duty that has shifted from manufacturer to purchaser and not the liability to the same – Unutilised credit under MODVAT scheme does not qualify for deductions u/s.43B – Proviso to s.43B takes care of the situation when liability to pay a sum has incurred but could not be paid in the year in question and has been paid in next financial year before the date of submission of the Return – In the present case, the liability to pay Excise Duty of the assessee is incurred on the removal of finished goods in the subsequent year i.e. year beginning from 01.04.99 and what the Court is concerned with is unutilised MODVAT Credit as on 31.03.1999 on which date the asseessee was not liable to pay any more Excise Duty– Present is not a case where appellant can claim benefit of proviso to s.43B – High Court correctly answered both the questions against the appellant and in favour of Revenue– Central Excise Act, 1944– Central Excise Rules, 1944 – rr.57A-57F.Central Excise Act, 1944 – Statutory liability to pay Excise Duty – Appellant-assessee manufactures automobiles chargeable to Excise Duty under the 1944 Act – It acquires excisable raw materials & inputs which are used in manufacturing of vehicles – Held: Excise duty is levied under 1944 Act and collected as per 1944 Rules – Assessee in reference to the 1944 Rules is Assessee as defined in r.2(3) – Manufacture of the raw materials or inputs used by the appellant are the excisable items within the meaning of 1944 Rules – Liability to pay Excise Duty is not fastened on two entities as per the scheme of 1944 Act and 1944 Rules – It is the manufacturer of raw materials and inputs which are used by appellant who has statutory liability to pay Excise Duty – Appellant is not assessee within the meaning of 1944 Act, with reference to raw materials and inputs manufactured by the entities from which appellant had purchased the raw materials – Central Excise Rules, 1944 – r.2(3).
Judge	Hon'ble Mr. Justice Ashok Bhushan
Neutral Citation	2020 INSC 150
Petitioner	Maruti Suzuki India Ltd.
Respondent	Commissioner Of Income Tax, Delhi
SCR	[2020] 2 S.C.R. 658
Judgement Date	2020-02-07
Case Number	11923

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