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2016 (9) TMI 571 - HC - Central ExciseExtended period of limitation - Valuation - amount of sales tax concession retained by the assessee - assessable value - 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 Life Long India Pvt. Ltd. vs. CCE 2012 (3) TMI 349 - CESTAT NEW DELHI . views as taken by the circular and Tribunal has been negated by the Apex Court - extended period of limitation not invokable - demand of duty and penalty set aside. Appeal dismissed - decided in favor of assessee.
Issues:
1. Dropping of demand towards duty pertaining to the extended period of limitation. 2. Justification of dropping the demand towards duty despite non-payment of Sales tax/VAT amounts to the Government. 3. Correctness of dropping the demand towards duty despite reliance on specific judgments. 4. Requirement to add any concession on sales tax retained by the respondent in the assessable value. 5. Setting aside of consequential penalty imposed on the respondent. 6. Justification of setting aside the penalty for the period within limitation. Analysis: 1. The appeal raised the issue of dropping the demand towards duty for the extended period of limitation. The Tribunal set aside the demand, citing a CBEC Circular and previous Tribunal decisions in favor of the respondent. The Tribunal concluded that the extended period of limitation was not invokable based on the circumstances and legal interpretations. Consequently, the demand and penalties were set aside, leading to the dismissal of the appeal. 2. The question of justification for dropping the demand towards duty despite the retention of Sales tax/VAT amounts by the assessee was also raised. The Tribunal considered the legal aspects, including the CBEC Circular and past Tribunal decisions, to determine that the assessee was not at fault. Therefore, the extended period of limitation was deemed inapplicable, resulting in the dismissal of the appeal. 3. The correctness of dropping the demand towards duty was further examined concerning the reliance on specific judgments by the Tribunal. Despite citing judgments that favored adding sales tax concessions in the assessable value, the Tribunal found in favor of the respondent based on the CBEC Circular and previous Tribunal decisions. Consequently, the demand for the extended period of limitation was set aside. 4. The issue of whether any concession on sales tax retained by the respondent should be added in the assessable value was addressed. The Tribunal referred to a CBEC Circular stating that such concessions need not be included in the assessable value. Considering this circular and previous Tribunal decisions, the Tribunal ruled in favor of the respondent, leading to the dismissal of the appeal. 5. Regarding the consequential penalty imposed on the respondent, the Tribunal justified setting it aside despite acknowledging that the sales tax concession was required to be added in the assessable value. The Tribunal found no merit in imposing penalties since the extended period of limitation was not applicable, as per the CBEC Circular and past Tribunal decisions. 6. Lastly, the issue of setting aside the penalty for the period within limitation was discussed. The Tribunal held that penalties were not imposable due to the circumstances and legal interpretations favoring the respondent. The dismissal of the appeal was based on the lack of fault on the part of the assessee and the inapplicability of the extended period of limitation.
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