2012 (2) TMI 506 - AT - Central Excise

Summary

Issues involved:
The appeal and stay applications against Order-in-Original No. 13/BR-13/Th-1/2011 dated 30.03.2011 passed by the Commissioner of Central Excise, Thane I.

Facts and Considerations:
The appellant, a manufacturer of goods under Chapter 73 and 84 of the Schedule to the CETA, received sales tax incentives totaling amounts for three consecutive years. The department alleged undervaluation and short payment of Central Excise duty due to the non-inclusion of these incentives in the assessable value. A show-cause notice was issued demanding Central Excise duty, interest, and penalty. The appellant contended that the sales tax incentives were received prior to 2006-07 and should not be included in the assessable value based on a Board circular and a Tribunal judgment in a similar case.

Arguments and Findings:
The appellant argued that the demand for duty was unsustainable as it pertained to a period more than 5 years prior to the notice, and the sales tax incentives should not be included in the assessable value based on relevant circulars and precedent. The revenue reiterated the adjudicating authority's findings. The Tribunal considered the arguments and found that a previous judgment on a similar issue concluded that sales tax incentives received under a government scheme should not be included in the assessable value for the levy of Central Excise duty. Consequently, the appeal was allowed, and the stay application was disposed of.

This judgment highlights the importance of considering government schemes and relevant circulars in determining the assessable value for the purpose of Central Excise duty, ensuring fair treatment for manufacturers receiving sales tax incentives.