2019 (9) TMI 66 - AT - Central Excise

Valuation - inclusion of element of the sales tax collected by it from the buyers in the assessable value - Section 4 of Central Excise Act 1944 - HELD THAT - The matter is no longer res-integra as the issue involved in the appeal has already been decided by this Tribunal in the appellant s own case M/S SHREE CEMENT LIMITED VERSUS CCG ST JODHPUR 2018 (4) TMI 1161 - CESTAT NEW DELHI where it was held that There is no justification for inclusion in the assessable value the VAT amounts paid by the assessee using VAT 37B Challans. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the appellant violated the provision of Section 4 of the Central Excise Act, 1944 by not including the element of sales tax collected in the assessable value.
- Whether the show cause notice demanding excise duty, interest, and penal provisions was justified.
- Whether the impugned order-in-appeal rejecting the appellant's appeal was valid.

Issue 1: Violation of Section 4 of the Central Excise Act, 1944
The appellant, engaged in cement manufacturing, was accused by the Department of not paying the full central excise duty by excluding sales tax collected from buyers in the assessable value. The appellant argued that the sales tax retained in the form of VAT-37A challan did not constitute part of the transaction value as per Section 4(3)(d) of the Central Excise Act, 1944.

Issue 2: Justification of Show Cause Notice
A show cause notice was issued demanding excise duty amounting to ?20,77,340 under Section 11A(1) of the Central Excise Act, 1944, along with the invocation of interest and penal provisions. The matter was adjudicated in an order-in-original where the charges were confirmed, leading the appellant to appeal to the Commissioner (Appeals) who rejected the appeal in an order-in-appeal.

Issue 3: Validity of the Impugned Order-in-Appeal
The Tribunal noted that a similar issue had been decided in the appellant's previous case, referencing a final order. The Tribunal highlighted the interpretation of the concept of transaction value under Section 4, emphasizing the actual payment of sales tax/VAT for excise duty benefit. Referring to a specific case, the Tribunal concluded that VAT amounts paid using specific challans were not required to be included in the assessable value. Consequently, the impugned order-in-appeal was deemed meritless and set aside, allowing the appeal.

This detailed analysis of the legal judgment addresses the issues of violation of Section 4 of the Central Excise Act, justification of the show cause notice, and the validity of the impugned order-in-appeal, providing a comprehensive understanding of the case and its legal implications.