2016 (11) TMI 1393 - AT - Central Excise

Quantum of abatement - Section 4(d) of the CEA, 1944 - demand of differential duty on the ground that the appellants have not produced evidence to the effect that the sales tax claimed as abatement has actually been paid to the State Government authorities - Held that - under Sl. No. E regarding total tax liability, it is clearly mentioned that tax deposited by the appellant includes cash payment as well as set of by credit of input tax. The total tax deposited as indicated in the VAT return ST-5A clearly shows that the amount deposited with the State authorities has been correctly availed as abatement by the appellant - There is no retention of any amount by the appellant as alleged in the SCN - appeal allowed - decided in favor of appellant.

Summary

Issues:
Dispute over quantum of abatement on sales tax under Section 4(d) of the Central Excise Act, 1944.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi was against an order dated 17.07.2007 of Commissioner (Appeals) Jaipur concerning a manufacturer of A.C. SR conductors liable to Central Excise duty. The core issue revolved around the quantum of abatement available on sales tax. The differential duty demand was confirmed due to the appellant's alleged failure to provide evidence that the claimed sales tax abatement had been paid to the State Government authorities. The contention was that the set-off given on input tax could not be considered for abatement of sales tax on the final products where excise duty was payable by the appellant.

The Tribunal carefully examined the arguments presented by both sides and reviewed the facts of the case. The appellant's counsel highlighted discrepancies in the show cause notice, emphasizing that the tax deposited by the appellant, as indicated in the VAT returns, included both cash payments and set-offs by credit of input tax. It was clarified that the amount deposited with the State authorities had been correctly availed as abatement by the appellant, with no retention of any amount as alleged in the notice. Reference was made to a circular by the Board and previous cases with similar facts to support the appellant's position.

Based on the admitted facts and the evidence presented, the Tribunal found no merit in the impugned order. Consequently, the Tribunal set aside the order and allowed the appeal in favor of the appellant. The judgment was pronounced on 16.11.2016 by the Technical Member of the Tribunal.