2003 (4) TMI 160 - AT - Central Excise

Summary

Issues:
Assessable value of compressed oxygen manufactured from liquid oxygen purchased, Sales tax collection and payment, Deduction of sales tax collected but not paid, Time bar for demand, Personal penalty imposition.

Assessable value of compressed oxygen manufactured from liquid oxygen purchased:
The case involved a dispute regarding the assessable value of compressed oxygen manufactured by the appellants from liquid oxygen purchased from outside parties. The appellants argued that since the sales tax on liquid oxygen had already been paid by the manufacturers, they were not required to pay it again on the compressed oxygen. They claimed that the sales tax collected from customers was a reimbursement of the tax already paid by them to the sellers. The Revenue contended that the appellants had not paid any sales tax and therefore the collected amount should be added to the assessable value of the compressed oxygen.

Sales tax collection and payment:
The appellants were collecting sales tax at the rate of 16% from customers but were not paying it to the sales tax department. The dispute revolved around whether this collected amount should be considered as an additional consideration flowing to the appellants or if it should be deducted from the assessable value of the compressed oxygen.

Deduction of sales tax collected but not paid:
The appellants sought to deduct the 16% sales tax collected from customers but not paid to the department from the assessable value of the compressed oxygen. They argued that since the second sale of oxygen was exempted from sales tax due to tax already paid at an earlier stage, the collected amount should not be included in the assessable value.

Time bar for demand:
The appellants challenged the demand on the grounds of time limitation, stating that the show cause notice was served beyond the six-month limitation period provided under Section 11A of the Act. The Revenue argued that the extended period of limitation was applicable due to the appellants' deliberate suppression of facts to evade duty payment.

Personal penalty imposition:
The appellants faced a personal penalty under Section 11AC, which was initially imposed at Rs. 1,85,168. The tribunal reduced the penalty to Rs. 50,000 considering the overall circumstances of the case, despite upholding the penalty imposition.

This detailed analysis covers the key issues involved in the legal judgment delivered by the Appellate Tribunal CEGAT, Kolkata.