2019 (5) TMI 462 - AT - Central Excise

Valuation - inclusion of amount of VAT/Sales Tax recovered by the appellants and retained by them in assessable value - Section 4 of the Central Excise Act, 1944 - HELD THAT - The issue involved in the present case stands decided against the appellant by the Hon ble Supreme Court in the case of Super Synotex (India) Ltd. V CCE Jaipur 2014 (3) TMI 42 - SUPREME COURT - The Apex Court held that the amount of sales tax concession retained by the manufacturer is required to be added to the assessable value for paying the Central Excise duty. The demand is to be restricted within the normal time limit - the matter to original authority only for the limited purpose of re quantifying the demand falling within the normal period of limitation - appeal allowed by way of remand.

Summary

Issues involved:
Identification of common issue in multiple appeals regarding inclusion of retained VAT amounts in assessable value for Central Excise duty and the restriction of demand to normal time limit.

Analysis:

Issue 1: Condonation of Delay
- A Misc. Application was filed for condonation of delay of 113 days in filing one of the appeals before the Tribunal.
- The delay was condoned based on reasons mentioned in the application.

Issue 2: Inclusion of Retained VAT Amounts
- Appellants established factories in North-East Region under State Government schemes allowing retention of VAT/Sales Tax.
- Department argued inclusion of retained VAT amounts in assessable value for Central Excise duty under Section 4 of the Central Excise Act, 1944.
- Show Cause notices issued for recovery of differential duty for 5 years based on suppression allegations.
- Original authority and First Appellate Authority confirmed demand, leading to appeals before the Tribunal.

Issue 3: Legal Arguments
- Appellants represented by Ld. CA argued that while Supreme Court ruled in favor of inclusion of VAT amounts, demand should be restricted to normal time limit.
- Referring to CBEC Circular and Guwahati High Court decision, Ld. CA sought modification of impugned order for demand restriction.

Issue 4: Tribunal Decision
- After considering arguments and records, Tribunal noted Supreme Court's decision on inclusion of VAT amounts.
- Tribunal acknowledged CBEC Circular and Guwahati High Court's decision to restrict demand within normal time limit.
- Tribunal modified impugned orders to re quantify demand within normal limitation period, remanding the matter to original authority.
- No penalty imposed, and all appeals were disposed of accordingly.

This judgment addressed the issue of inclusion of retained VAT amounts in the assessable value for Central Excise duty, emphasizing the restriction of demand to the normal time limit based on legal precedents and circulars. The Tribunal's decision provided clarity on the application of relevant laws and upheld the principle of imposing demands within statutory limitations, ultimately modifying the orders and remanding the matter for further assessment within the specified timeframe.