TVS SRICHAKRA LTD Vs. STATE OF KERALA

JUDGEMENT

(1.) Appellant company is engaged in the manufacture of tyres, tubes and flaps for motor vehicles and is having the factory for the manufacture of these items in Tamil Nadu. The appellant is having sales depots throughout India. It also having a purchase depot at Thiruvananthapuram for the purchase of rubber from the Kerala state. After purchase it is transferred to the head office at Madurai for the manufacture of the products. Government by notification S.R.O.No.767/98 exempted dealers other than manufacturers in including rubber cess in the turnover for the purpose of purchase tax for a limited period. Item 41 of the above exemption notification reads as follows:

(2.) Rubber cess is equivalent to excise duty and is tax on manufacturer. The rubber cess is charged as per Section 12 of the Rubber Act, 1947. Section 12 of the Rubber Act, reads as follows:

(3.) The Supreme Court in State of Kerala V. Madras Rubber Factory Ltd. ((1998) 108 STC 583 (S.C.)) overruling the Full Bench decision of this court held that the incidence of excise duty is directly relatable to manufacturer but its collection can be deferred to a latter stage as a measure of convenience. As per Rules 33(e), 33A, 33B and 33D(1) of the Rubber Rules, 1955 the excise duty even though payable by the manufacturer can be collected at a latter stage. The Apex Court also held that the incidence of excise duty will start from the date of production and therefore the incidence is a part of the price of the goods purchased. The Supreme Court in paragraph 21 of the judgement held as follows: