2018 (3) TMI 1484 - AT - Central Excise

Additional consideration - sales tax collected by the appellant on sale of goods and payable under deferred payment scheme but not paid to State Government due to availment of facility under advance payment of deferred tax scheme at Net Present Value provided by State Government - Section 4 of the CEA 1944? Held that - Tribunal having ruled in favor of the assessee reflects upon the fact that the issue is capable of two different interpretations. In such scenario assessee cannot be held to be having any malafide intention for adopting the interpretation which the Tribunal has also upheld - extended period cannot be invoked. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the portion of sales tax collected by the appellant under a deferred payment scheme but not paid to the State Government can be considered additional consideration under Section 4 of the Central Excise Act, 1944. Whether the period involved justifies an extended period of limitation for the Revenue.

Analysis:
The primary issue in this appeal was whether the sales tax retained by the appellant, under a tax concession scheme, should be added to the assessable value of the final product for duty calculation purposes. The appellant's Advocate acknowledged that previous Supreme Court decisions had ruled in favor of including such amounts in the assessable value. The Advocate contested the imposition of an extended period of limitation by the Revenue, citing the period involved from 2004 to 2005 and the absence of suppression or misstatement by the assessee. The Advocate relied on previous decisions to support the argument against the extended limitation period.

The Tribunal considered the issue of limitation in light of the decisions of the Hon'ble Supreme Court. It noted that the show-cause notice was issued beyond the normal period of limitation. The Tribunal referenced the Supreme Court's observations in previous cases, emphasizing that when the earlier view in favor of the assessee was subsequently overruled, the extended period of limitation should not apply. The Tribunal highlighted that during the relevant period, the law declared by the Tribunal was in favor of the assessee, indicating a legitimate basis for the assessee's position.

Ultimately, the Tribunal concluded that the extended period of limitation could not be invoked in the present case. The impugned order was set aside on the grounds of limitation, and the appeal was allowed in favor of the appellant. The Tribunal's decision was based on the absence of malafide intention by the assessee, the legitimate interpretation upheld by the Tribunal, and the existence of two plausible interpretations of the issue. The judgment underscored the importance of considering the historical context and the prevailing legal interpretations during the relevant period.