2018 (4) TMI 1301 - AT - Central Excise

Valuation - inclusion of VAT - whether the VAT which has been collected and retained by the appellants to the extent of 99% (as 1% deposited with the State Exchequer) is to be added to the assessable value for determining the Central Excise duty payable? - Held that - an identical issue has come up before the Tribunal in the cases of M/s Bhagwat Sai Metal Alloys & Others Vs. Commr. of Central Excise, Guwahati 2018 (4) TMI 1294 - CESTAT KOLKATA , where the matters were remanded to the adjudicating authority to decide the issue denovo - matters remanded to the adjudicating authority to decide the issues denovo but by providing the reasonable opportunity to the assessees - appeal allowed by way of remand

Summary

Issues:
Whether VAT collected and retained by the appellants should be added to the assessable value for determining Central Excise duty payable.

Analysis:
The appellants had established factories in the North-East Region and were benefiting from Notification No.20/2007 dated 25.04.2007, along with various subsidies and VAT/Sales Tax benefits. They were allowed to collect VAT from customers and retain it, with only 1% to be paid to the State Exchequer during VAT assessment. However, Central Excise Notification No.20/2007 stated that duty paid was refundable at the time of assessment. The dispute revolved around whether the VAT collected and retained by the appellants, excluding the 1% paid to the State Exchequer, should be included in the assessable value for determining Central Excise duty. The lower authorities had ruled against the appellants, ordering the inclusion of the retained VAT in the assessable value.

The Tribunal noted a similar issue in the case of M/s Bhagwat Sai Metal Alloys & Others Vs. Commr. of Central Excise, Guwahati, where matters were remanded for a fresh decision. Following this precedent, the Tribunal set aside the impugned order and remanded the matters to the adjudicating authority for a denovo decision, ensuring a reasonable opportunity for the assessees. The Tribunal allowed the appeals by way of remand, providing scope for fresh evidence to be admitted if necessary.

In conclusion, the Tribunal's decision allowed the appeals by remanding the matters to the adjudicating authority for a fresh decision, following a similar precedent. The appellants were granted the opportunity for a denovo determination on whether the VAT collected and retained should be added to the assessable value for Central Excise duty, ensuring a fair process with the admission of fresh evidence if required.