2024 (1) TMI 133 - AT - Central Excise

Invocation of extended period of limitation - penalty - includability of the sales tax concession retained by the Appellant in the assessable value for the purpose of levy of Central Excise duty - HELD THAT - The issue is no more res integra as the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR-II VERSUS M/S. SUPER SYNOTEX (INDIA) LTD. AND OTHERS 2014 (3) TMI 42 - SUPREME COURT , has held that the sales tax concession retained by the assesses is required to be added in the assessable value for the purpose of levy of Central Excise duty. By relying on the above decision of the Hon ble Supreme Court, the sales tax concession retained by the Appellant is required to be added in the assessable value for the purpose of levy of Central Excise duty. The Appellant has agreed for the payment of duty for the normal period of limitation.. The Appellant has not suppressed any information from the department - As there is no evidence of suppression of facts available on record, we hold that the demand confirmed by invoking the extended period is liable to be set aside. Penalty - HELD THAT - The Appellant submits that they have not suppressed any information from the department. There were decisions of the Tribunals that the sales tax concession retained by the assesses is not required to be added in the assessable value for the purpose of levy of Central Excise duty. Thus, the appellant cannot be faulted for not including the same in the assessable value. In the impugned order, the adjudicating authority while agreeing that extended period not invocable in this case, imposed penalty equal to the duty confirmed under Section 11AC of the CEA, 1944 - the penalty imposed under Section 11AC not tenable. The Appellant is liable to pay duty for the normal period of limitation. The demand confirmed by invoking the extended period of limitation is set aside - penalty imposed under Section 11AC of the CEA, 1944 is set aside - appeal is disposed by way of remand for calculating the duty, payable for the normal period of limitation, with consequential relief, if any, as per law. Appeal allowed in part and part matter on remand.

Summary

Issues involved:
The issues involved in the judgment are the confirmation of demand by invoking the extended period of limitation, imposition of penalty under Section 11AC of the CEA, 1944, and the includability of sales tax concession in the assessable value for the levy of Central Excise duty.

Confirmation of Demand and Penalty Imposition:
The appeal was filed against the Order-in-Appeal confirming the demand of Rs.20,41,472/- including Education Cess and SHE Cess along with interest, by invoking the extended period of limitation. The Appellant argued that the demand was confirmed incorrectly as per the decision of the Hon'ble Supreme Court and Board Circular. The Tribunal observed that the Appellant agreed to pay duty for the normal period and had not suppressed any information. As there was no evidence of suppression, the demand confirmed by invoking the extended period was set aside. Regarding the penalty imposed under Section 11AC, the Tribunal found that the adjudicating authority did not provide a proper basis for imposing the penalty and held it as not tenable.

Includability of Sales Tax Concession:
The main issue in the appeal was the includability of the sales tax concession retained by the Appellant in the assessable value for the levy of Central Excise duty. The Tribunal referred to the decision of the Hon'ble Supreme Court in the case of Super Synotex (India) Ltd. Vs CCE, Jaipur, where it was held that the sales tax concession retained by assesses must be added to the assessable value for Central Excise duty. The Tribunal upheld this decision and concluded that the sales tax concession retained by the Appellant should be included in the assessable value for levy of Central Excise duty.

Relevant Circular and Conclusion:
The Tribunal also considered Circular No. 1063/2/2018-CX issued by the Board, which clarified that the extended period should not be invoked in cases where sales tax concession was retained. The Tribunal found that there was no evidence of suppression by the Appellant and held that the extended period was not invocable in this case. Consequently, the penalty under Section 11AC of the CEA, 1944 was also deemed not imposable. The appeal was partially allowed, setting aside the demand confirmed by invoking the extended period and the penalty imposed, with the case remanded for calculating the duty payable for the normal period of limitation.