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HindustanTimes Fri,25 Apr 2014

Goods made before March 16 won’t attract revised duty

Pushpa Girimaji, Hindustan Times   March 17, 2012
First Published: 22:00 IST(17/3/2012) | Last Updated: 22:03 IST(17/3/2012)

Upset about having to pay more post-budget for that dream car or air-conditioner that you were planning to buy? Well, don’t fret. You can still get them at the old price because only those goods that have left the manufacturing unit from the midnight of March 16 will attract the revised excise duty. The stock that had left the factory earlier, as well as those stored in the godowns of dealers will be available at the old rate.

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Of course, there is a possibility of the dealer charging you more on the pretext of having paid higher taxes. He may argue that any sale, post-budget, attracts an additional duty. Well, don’t fall for such arguments. If the manufacturer has not paid the additional duty, then asking you to pay it is not just illegal, but constitutes an unfair trade practice. In fact, you should ask him to show the sale invoice that indicates the date on which the goods left the factory — from that you can make out whether he has paid the additional duty or not.

You may also tell him that the apex consumer court does not take kindly to such practices, which lead to unjust enrichment of the dealer/ manufacturer. If he does not believe you, ask him to read the decision of the National Consumer Disputes Redressal Commission in M/S Tata Engineering Locomotive Company Ltd and Sakti Automobiles Vs John Jacob (RP NO 1079 of 1998, decision: April 4, 2006).

Here, the central issue was whether the dealer was justified in charging an additional sum of R38,344 from the consumer at the time of delivery of  Tata Sumo in September 1996,  on the ground that the excise duty had scaled up?

Since excise duty is paid on the day the vehicle is released from the factory, the commission asked the manufacturer to furnish this information and it was clear that the vehicle had left before the duty revision.

In other words, the manufacturer had not paid the additional duty on that vehicle. Yet, the counsel for the manufacturer argued that the consumer had to pay the increased duty as the vehicle was delivered after the hike was announced.

Dismissing such a contention, the commission pointed out that first of all,  Section 12C of the Excise Act provided that if the duty is wrongly or erroneously recovered even by the Central Excise Department, it is required to be refunded and deposited in the ‘Consumer Welfare Fund’. Hence, if the excise duty is not payable, it cannot be retained  either by the manufacturer,  dealer or even the excise department.

Second,  when the manufacturer himself had not paid the additional duty, to ‘recover’ it from the consumer was not just illegal, but  constituted an unfair trade practice under the Consumer Protection Act.

Directing the manufacturer and the dealer not to indulge in such a practice, it asked them to refund the additional amount collected from the consumer, along with 12% interest.  And for collecting the duty without any justification and then prolonging the litigation for years together, it imposed costs of Rs. 25,000 to be paid to the consumer.

Monica Singh: Can a dealer from whom I ordered a split AC on March 16 (I even paid the full amount), ask me to pay the additional duty because the delivery is being made the next day? 

Answer: The decision of the National Commission that I have narrated above answers your question.

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