2015 (10) TMI 2065 - AT - Central Excise

Valuation - Inclusion of amount of sales tax retained - Held that - During the relevant period there was CBEC Circular dated 30.06.2000 which provides that any amount of concession on sales tax retained by the respondent is not required to be added in the assessable value and there are certain judicial pronouncements of this Tribunal holding the same view in the case of Kinetic Engineering Ltd. (2012 (6) TMI 168 - CESTAT, MUMBAI) and Life Long India Pvt. Ltd. Vs. CCE Delhi- 2012 (3) TMI 349 - CESTAT NEW DELHI . As there were view taken by the CBEC Circular and this Tribunal in favour of the respondent which has been negated by the Hon ble Apex Court in the decision cited before us today. In these circumstances, we hold that extended period of limitation is not invokable. Consequently, demand pertaining to the extended period of limitation which is sought to be demanded from the respondent are set aside. Consequently, the penalties on the respondents are not imposable. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Liability of the respondent to pay duty on the amount of sales tax concession retained.
2. Applicability of extended period of limitation for demanding duty and imposing penalties.

Analysis:

Issue 1:
The case involved the liability of the respondent, a manufacturer of excisable goods registered with the Central Excise department and Haryana Sales Tax Act, to pay duty on the amount of sales tax concession retained. The Revenue contended that the amount retained by the respondent as part of the income on account of sales tax should be added to the assessable value of goods sold, making the respondent liable to pay duty. The impugned order confirmed the duty demand, interest, and penalty. However, the respondent challenged this before the Ld. Commissioner (A), relying on a Tribunal decision in a similar case. The Tribunal held that the respondent was not liable to pay duty or include the sales tax concession amount in the assessable value. The Revenue appealed this decision.

Issue 2:
Regarding the applicability of the extended period of limitation for demanding duty and imposing penalties, the Tribunal considered the contention of the respondents. During the relevant period, a CBEC Circular existed stating that any concession on sales tax retained by the respondent did not need to be added to the assessable value. Previous Tribunal decisions also supported this view. However, the Hon'ble Apex Court's decisions in specific cases clarified that the sales tax concession amount should be included in the assessable value. The Tribunal concluded that the extended period of limitation was not applicable based on the conflicting views between the CBEC Circular, Tribunal decisions, and the recent Apex Court judgments. Consequently, the demand related to the extended period was set aside, and penalties were deemed not imposable.

In the final order, the Tribunal disposed of the appeals by remanding the case to the adjudicating authority to quantify the demand within the limitation period, which the respondent was directed to pay within 30 days along with interest for the intervening period.