2021 (7) TMI 1348 - AT - Central Excise

Extended period of limitation - Valuation of Central Excise duty - VAT amount retained by the assessee would be includible in assessable value or not - Sales Tax remission under the Assam Value Added Tax Act - HELD THAT - The applicability of extended period of limitation has been decided subsequent to the outcome of the decision in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II VERSUS M/S. SUPER SYNOTEX (INDIA) LTD. AND OTHERS 2014 (3) TMI 42 - SUPREME COURT . It is found that the issue has been decided in detail by the Tribunal in the case of CCE ST, RAIPUR VERSUS. M/S. JAYASWAL NECO INDUSTRIES LTD. 2015 (8) TMI 963 - CESTAT NEW DELHI as relied upon by the Appellant, where it was held that appellant during the period of dispute were liable to pay duty on the assessable value including amount of VAT collected by them from their customers and retained by them and since the VAT amount was not included in the assessable value, there has been short payment of duty. However, the duty demand for the 2006-07 period has been issued only on 28.4.2011 by invoking extended period of five years under proviso to Section 11 A(1) and this demand would survive only if it can be proved that the appellant had not acted under bona fide belief or that they had committed fraud or wilful misstatement or suppression of facts with intent to evade payment of duty. Since the issue is no longer res integra, there is no reason to take a contrary view. Moreover, it is found that taking note of the outcome of decision of Hon ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II VERSUS M/S. SUPER SYNOTEX (INDIA) LTD. AND OTHERS 2014 (3) TMI 42 - SUPREME COURT which decided the valuation issue against the assessee, the SCN dated 04.06.2014 was issued soon thereafter to raise the impugned demand. Since there were Board Circulars wherein it was clarified that VAT amount retained by the assessee would not be liable to be included in the assessable value, which fact has also been noted by the Hon ble High Court and the co-ordinate Benches of the Tribunal, the assessee cannot be faulted. The impugned demand cannot be sustained on the point of limitation and thus, set aside - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Central Excise duty demand against M/s. Abdos Lamitubes Pvt. Ltd.
- Inclusion of VAT amount retained in assessable value.
- Availability of extended period of limitation for raising demand.

Central Excise Duty Demand:
The appeal was filed against a demand of Central Excise duty of Rs.56,78,807/- along with interest and penalty. The Appellant, engaged in Lamitubes manufacturing, was retaining 99% of Sales Tax/VAT collected from buyers under the Assam Value Added Tax Act. A Show Cause Notice was issued to include the VAT amount retained in the assessable value for Central Excise duty payment, following the Supreme Court's decision in a similar case.

Inclusion of VAT Amount in Assessable Value:
The issue was settled in favor of the Revenue based on the Supreme Court's decision. However, the Appellant argued against the availability of the extended period of limitation for the Department. The Appellant cited various decisions and a CBEC Circular stating that the extended period of limitation should not apply in such cases. The Tribunal analyzed previous judgments and Circulars, concluding that the Appellant acted under a bona fide belief regarding the inclusion of VAT amount, thus making the duty demand time-barred.

Availability of Extended Period of Limitation:
The Tribunal referred to decisions like Jayaswal Neco Industries Ltd and observed that the Appellant acted in good faith based on Circulars and Tribunal judgments. The High Court's observations in similar cases supported the Appellant's position. Considering the legal position and factual circumstances, the Tribunal set aside the demand due to the absence of fault on the Appellant's part. The appeal was allowed with consequential relief as per law, emphasizing the non-sustainability of the demand on the limitation aspect.