Sales Tax Retained Under VAT Deferment Includible in Excise Value

Centax Editorial Board

December 22, 2025

• 3 min. read

Case Details: Delphi Automotive Systems Pvt. Ltd. Versus Commissioner Of Central Excise, Goods & Service Tax, Gurugram (2025) 37 Centax 213 (Tri.-Chan)

Judiciary and Counsel Details

S/Shri S.S. Garg, Member (J) & P. Anjani Kumar, Member (T)
Ms Krati Singh with S/Shri Aman Singh & Monarch Mittal, Advocates, for the Appellant.
Shri Shantanu Kumar Meena, Authorised Representative, for the Respondent.

Facts of the Case

The appellant engaged in sales under the deferment scheme provided under Rule 69 of the Haryana VAT Rules, 2003, whereby 50% of the sales tax was retained by the appellant instead of being remitted immediately to the government. The appellant contended that since the retained portion of the sales tax was not actually paid or payable to the exchequer, it should not be included in the assessable value for the purpose of Central Excise duty. The matter was accordingly placed before the CESTAT.

CESTAT Held

The CESTAT held that the retained 50% of sales tax effectively becomes a profit or an excessive cost paid by the purchaser to the appellant and is therefore includible in the assessable value for levy of Central Excise duty. It was observed that Section 4(3)(d) of the Central Excise Act, 1944, requires that any amount that is part of the price paid by the purchaser, even if not actually remitted to the government, forms part of the transaction value. Accordingly, the amount retained under Rule 69 of the Haryana VAT Rules, 2003, w.e.f. 01-04-2003, is includible in the assessable value for Central Excise duty.

List of Cases Cited

Agrico Engg. Works (India) Pvt. Ltd. v. Commissioner — 2000 (122) E.L.T. 891 (Tribunal) — Referred [Para 5.2]
Alaska Tyres Pvt. Ltd. v. Commissioner — 2002 (145) E.L.T. 329 (Tribunal) — Referred [Para 5.2]
Bharat Roll Industries Pvt. Ltd. v. Commissioner — 2015 (317) E.L.T.A187 (S.C.) — Referred [Paras 5.1, 5.2]
BST Infratech Ltd. v. Commissioner — 2022 (62) G.S.T.L. 334 (Tribunal) — Referred [Paras 4.2.2]
Commissioner v. Maruti Suzuki India Ltd. — 2014 (307) E.L.T. 625 (S.C.) — Relied on [Paras 4.2, 4.3.1, 5.1, 7]
Commissioner v. S.G. Engineers — 2024 (8) TMI 199-CESTAT Chandigarh — Referred [Paras 4.2.2]
Commissioner v. Shree Rajasthan Syntex Ltd. — 2015 (318) E.L.T. 626 (S.C.) — Referred [Para 5.2]
Commissioner v. Super Synotex (India) Ltd. — 2014 (301) E.L.T. 273 (S.C.) — Referred [Para 5.1]
Denso Haryana Pvt. Ltd. v. Commissioner — 2017 (10) TMI 1028-CESTAT Chandigarh — Relied on [Paras 4.2, 4.3.1, 7]
FMI Automotive Components Ltd. v. Commissioner — 2025 (2) TMI 141-CESTAT Chandigarh — Referred [Paras 4.2.1, 4.2.2, 4.2.3]
Hindustan Coca Cola Beverages Pvt. Ltd. v. Commissioner — 2018 (1) TMI 761-CESTAT Chennai — Referred [Paras 4.3.2]
Honda Motorcycles & Scooters India Pvt. Ltd. v. Commissioner — 2017 (357) E.L.T. 828 (Tribunal) — Relied on [Para 4.2]
Johnson Matthey India Pvt. Ltd. v. Commissioner — 2025 (2) TMI 258-CESTAT Chandigarh — Relied on [Paras 4.2, 4.3.1, 7]
Shree Arihant Tradelinks India Pvt. Ltd. v. Commissioner — 2021 (12) TMI 581-CESTAT Ahmedabad — Referred [Paras 4.2.1, 4.2.3 ]
Sree Gokulam Food and Beverages Pvt. Ltd. v. Commissioner — 2024 (3) TMI 490-CESTAT Chennai — Referred [Paras 4.2.3, 4.3.2]
SRK Metals and Plastics Pvt. Ltd. v. Commissioner — 2025 (4) TMI 1534-CESTAT Kolkata — Relied on [Paras 4.2, 4.3.1]
Suzuki Motorcycle India Pvt. Ltd. v. Commissioner — (2024) 18 Centax 370 (Tri. – Chan.) — Referred [Paras 4.2.1, 4.2.3]
Uniflex Cables Ltd. v. Commissioner — 2011 (271) E.L.T. 161 (S.C.) — Referred [Paras 4.3.2]