Page 107 - ELT_15th June 2020_VOL 372_Part 6th

Law

2020 (372) E.L.T. 785 (S.C.)
IN THE SUPREME COURT OF INDIA
Ashok Bhushan and Navin Sinha, JJ.
MARUTI SUZUKI INDIA LTD.
Versus
COMMISSIONER OF INCOME TAX, DELHI
Civil Appeal No. 11923 of 2018 with C.A No. 11924 of 2018, decided on 7-2-2020
1
Cenvat/Modvat credit - Unutilised credit at end of accounting year -
Income-tax - Deduction as business expenditure - Deduction only of “any sum
payable by the assessee by way of tax, duty, cess or fee...” and only in respect
of sum actually paid by assessee - Modvat credit accumulated to assessee (car
manufacturer)’s account due to payment of Excise duty on raw materials and
inputs supplied to it - Liability to pay Excise duty on raw materials and input
on supplier and not assessee - Only incident of Excise duty shifts from manu-
facturer of raw materials and inputs to purchaser and not liability to same -
Credit of Excise duty earned by assessee under Modvat scheme not sum paya-
ble by it by way of tax, duty, cess - Unutilised credit in Modvat scheme cannot
be treated as sum actually paid by assessee - Assessee cannot take benefit of
proviso to Section 43B of Income Tax Act, 1961 in respect of liability to pay
Excise duty of assessee to be incurred on removal of finished goods in subse-
quent year i.e. year beginning from 1-4-1999 to allow deduction of unutilised
Modvat credit as on 31-3-1999 - As on 31-3-1999 assessee was not liable to pay
any more Excise duty - Such unutilised credit not qualified for deduction un-
der Section 43B ibid - Rules 57A to 57-I of Central Excise Rules, 1944. - The pro-
viso to Section 43B provides that nothing contained in the section shall apply in relation
to any sum which is actually paid by assessee on or before due date applicable in his case
for furnishing the return in respect of the previous year in which the liability to pay such
sum was incurred. The crucial words in the proviso to Section 43B are “in respect of the
previous year in which the liability to pay such sum was incurred”. The proviso 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 the next financial year before the date of submission
of the Return. [1999 (106) E.L.T. 3 (S.C.); 1999 (112) E.L.T. 353 (S.C.); 2004 (165)
E.L.T. 488 (S.C.) distinguished]. [paras 15, 16, 17, 23]
Tax recoverable account - Income-tax - Deduction as business expendi-
ture - Sales tax paid by assessee debited to separate ‘Sales Tax recoverable ac-
________________________________________________________________________
1 On appeal from Income Tax Appeal No. 31 of 2005, decided on 7-12-2017 by Delhi High Court.
EXCISE LAW TIMES  15th June 2020  107