2019 (4) TMI 1067 - AT - Central Excise

Valuation - inclusion of Sales Tax collected from their buyers and retain the same without remitting to the Sales Tax Department in assessable value - HELD THAT - The issue has been settled by the Hon ble Supreme Court in the case of Super Synotex (India) Ltd. Vs. CCE Jaipur 2014 (3) TMI 42 - SUPREME COURT , wherein the Apex Court has approved the inclusion of the retail Sales Tax in the assessable value - the issue stands decided against the appellant on merit. Time Limitation - HELD THAT - The CBEC has clarified the issue (among other things) vide their circular No. 1063/2/2018-CX dated 16/02/2018 and held that such amount retained by the assessee is not required to be added to the assessable value - Since there was no clarity on the issue, the assessee cannot be said to be at fault, hence extended period would not be available to raise the demand. The appellant will be entitled to the benefit of time bar - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Valuation dispute regarding inclusion of Sales Tax collected in assessable value for Central Excise Duty; Benefit of limitation for demand of differential duty.

Valuation Dispute:
The appellant, a Sodium Silicate manufacturer, collected Sales Tax under West Bengal Sales Tax Act in a backward district. Revenue demanded inclusion of Sales Tax in assessable value for Central Excise Duty. Lower Authorities upheld the demand, citing the case of Super Synotex (India) Ltd. Vs. CCE Jaipur. The Hon'ble Supreme Court decision in the same case approved inclusion of Sales Tax in assessable value, stating it as the price of goods. The issue was settled against the appellant on merit.

Benefit of Limitation:
The appellant argued for the benefit of limitation based on CBEC Circular No. 1063/2/2018-CX. The Circular referred to a High Court decision and CESTAT's ruling on the inclusion of Sales Tax in assessable value. The High Court held that due to lack of clarity, the extended period of limitation would not apply. Considering the Circular and Apex Court's decision, the Tribunal found in favor of the appellant for the benefit of time bar. As no demand survived within the normal time limit, the impugned order was set aside, and the appeal was allowed.

This judgment addressed the valuation dispute regarding the inclusion of Sales Tax in the assessable value for Central Excise Duty and the benefit of limitation for the demand of differential duty. The Tribunal upheld the decision against the appellant on the valuation issue based on the Supreme Court precedent. However, the Tribunal ruled in favor of the appellant for the benefit of limitation, citing the CBEC Circular and the lack of clarity on the issue. The appellant was granted relief as no demand existed within the normal time limit, leading to the allowance of the appeal.