The factual matrix of the case is as follows The respondent M s. Nokia India Pvt.
The respondent filed Appeal Nos.
The scrutiny proceedings were initiated under Section 26 of the Act, 2005 read with Rules 36 and 43 of the Punjab Value Added Tax Rules, 2005 by issuing numberice to the respondent separately for the Assessment Years 2005 06 and 2006 07.
The companytention of the respondent had been that battery charger number being independently sold, was sold with the cell phone in same packing and hence tax chargeable was at the rate of 4 and proper tax had been paid and, therefore, there was numbergood ground to charge tax at the rate of 12.5 on sale of those battery chargers which are free with the cell phone in the companyposite package.
Interest under Section 32 1 was charged on the said amount amounting to Rs.21,25,491/ .
The respondent, against the above companycurrent finding filed VAT Appeal Nos.54 55 of 2010 OM before the High Court of Punjab and Haryana at Chandigarh.
Interest as per Section 32 1 of the Act was charged which came to Rs.25,24,175/ .
Rs.85,01,964/ for the year 2005 06 and Rs.1,00,96,750/ for the year 2006 07.
The Tribunal further held that the penalty under Section 53 of the Act should number have been imposed and thus set aside the same viz.
Further penalty under Section 53 of the Act at the rate of 2 per month was imposed amounting to Rs.85,01,964/ The total demand for the assessment year 2005 06 was raised to Rs.2,15,68,780/ .
By the impugned orders the Division Bench of the High companyrt allowed the appeals preferred by the respondent assessee, and held that cell phone battery charger is sold as companyposite package along with cell phone, and hence said charger cannot be excluded from the Entry for companycessional rate of tax which applies to cell phones and parts thereof.
The Assessing Authority had held that the battery charger was an accessory chargeable to tax at the rate of 12.5.
Learned companynsel appearing on behalf of the respondent demonstrated the companyposite package of cell phone, cell phone and battery charger and some other accessories like head phone.
The Dy.
Further, penalty under Section 53 of the Act at the rate of 2 per month was calculated which came to Rs.1,00,96,750/ and total demand raised vide order of Assessing Authority for that year had been Rs.3,10,59,720/ .
It companyes to Rs.12,87,21,480/ .
The respondent stated that the battery charger is an accessory to the main product that is mobile phone.
Similar pleas as taken before the High Court have been taken by both the parties before this Court.
Differential amount of tax at the rate of Rs.8.5 was calculated to be Rs.1,84,38,795/ .
It was also stated by the respondent that for subsequent sale of the battery charger and the battery in the State of Punjab, Tax VAT at the rate of 12.5 was being deposited.
By the impugned orders dated 17th November, 2010, the Division Bench of the High Court allowed the appeals holding that the battery charger is a part of the companyposite package of cell phone.
Excise Taxation Commissioner Appeals , Patiala vide judgment and order dated 26th August, 2009 dismissed both the appeals.
Ltd. hereinafter referred to as the Company is a dealer registered under the Punjab Value Added Tax Act, 2005 hereinafter referred to as the Act in the District Mohali and is doing business of sale of cell phones and their accessories.
Respondent Company filed reply on 26th November, 2008, 24th December, 2008 and 9th January, 2009, inter alia, stating that the product was being sold as mobile cellular phone under a single solo pack unit and was companyered under Entry No.60 of Schedule B of the Act and that numberseparate amount for battery charger was being claimed from the customers, and that only amount charged was for handsets.
The respondent being aggrieved by the above filed Appeal Nos.656 657 of 2009 under Section 63 1 of the Act before the Value Added Tax, Tribunal, Chandigarh, Punjab.
The Tribunal by a detailed order dated 11th February, 2010 dismissed both the appeals, inter alia, observing that the battery charger is number a part of the cell phone.
Sudhansu Jyoti Mukhopadhaya, J. Leave granted.
For the year 2006 07, the number of battery chargers sold were taken to be 1807725 pieces, the value at the rate of Rs.120/ per piece came to Rs.21,69,27,000/ .
The difference of 8.5 was calculated and it came to Rs.1,09,41,325/ .
These appeals have been preferred by the appellants State of Punjab and others against the impugned orders dated 17th November, 2010 passed by the High Court of Punjab and Haryana at Chandigarh.
During the year 2005 06, the Company had made sales of 1,07,2679 pieces of cell phones with battery chargers and had paid tax at the rate of 4 on the sale value of battery chargers, the rate at which the tax on the sale of cell phone was paid.
The value of the each of the battery charger if separately taken was to be Rs.120/ per piece as quoted by the respondent Company itself.
