2007 (5) TMI 8 - SC - Central Excise

Demand Alleged the assessee give no intimation about the sales tax exemption or deposit made to range officer or any other authority Tribunal after considering the detail extended period of limitation invoked on the assessee

Summary

Issues:
1. Time bar for duty demand under Section 11A of the Central Excise Act, 1944.
2. Assessment of duty based on sales tax deductions and subsequent payment of differential duty.
3. Claim of exemption under sales tax laws and collection of sales tax without depositing it with the authorities.
4. Lack of evidence of intimation regarding sales tax exemption or deposit made.
5. Applicability of benefit under Section 4(4)(d)(ii) for duty calculation.

Analysis:

1. The appeal challenged the order passed by the Customs Excise and Gold (Control) Appellate Tribunal, which allowed the respondent's appeal regarding the removal of goods and payment of duty between July 1995 to March 1996. The show-cause notice issued almost four years after the payment of differential duty was held to be time-barred under Section 11A of the Central Excise Act, as there was no evidence of suppression, mis-declaration, or fraud by the assessee. Thus, the appeal was allowed on the ground of time bar without delving into the merits of the case, leading to the assessee being entitled to the return of the excess amount paid over and above the differential duty.

2. The background facts revealed that the assessee claimed deductions from the price towards sales tax, which was denied by the sales tax authorities. The duty was assessed and paid based on the revised value after including the sales tax element initially excluded from the price. The Commissioner of Central Excise issued a show-cause notice in 2000 alleging duty evasion, which was contested before the CEGAT. The CEGAT held the demand as time-barred, considering the period of assessment and the payment of differential duty made by the assessee in 1996.

3. The appellant's counsel argued that the exemption was claimed under sales tax laws, but the collection of sales tax was admitted by the assessee without depositing it with the authorities. The lack of intimation about the exemption or deposit was highlighted, along with the acceptance of collection without proper disclosure.

4. The Commissioner found no evidence of intimation provided by the assessee regarding the sales tax exemption or deposit made. The reply to the show-cause notice indicated that the amount collected towards sales tax formed part of the price, affecting the duty calculation. The applicability of Section 4(4)(d)(ii) was contested, with the Commissioner emphasizing the absence of relevant documentation or compliance.

5. The extended period of limitation was deemed applicable due to the lack of information regarding the deposit and exemption claim, leading to the payment of differential duty under pressure without a valid legal basis. The Tribunal refrained from expressing an opinion on the benefit under Section 4(4)(d)(ii) and directed consideration of pending legal proceedings before the Punjab and Haryana High Court for further clarity.