2015 (8) TMI 1320 - AT - Central Excise

Tribunal rules sales tax concession affects assessable value; penalties not applicable as per Apex Court decisions.

C.C.E. Delhi-III Gurgaon Versus M/s. NHK Spring India Ltd., M/s. Innovative Tech Pack Ltd., M/s. Spaceage Switchgears Ltd., M/s. Neel Metal Products Ltd., M/s. Hi Lex India Pvt. Ltd.

The Tribunal held that the sales tax concession retained by the respondent must be added to the assessable value of goods sold. The demands related to the ... Valuation - includability - amount of sales tax concession retained by the respondent - Held that:- the issue has been settled by the Hon’ble Apex Court in the Case of Maruti Suzuki India Ltd. Vs. CCE Delhi [2014 (9) TMI 229 - SUPREME COURT] and Super Synotex (India) Ltd. Vs. CCE Jaipur [2014 (3) TMI 42 - SUPREME COURT] wherein Hon’ble Apex Court has held that amount of sales tax concession retained by the respondent is required to be added in the assessable value. Therefore, the issue is no more res integra and we hold that the impugned orders are not correct on merits. Invokation of extended period of limitation - Demand and imposition of penalty - Held that:- as there were view taken by the CBEC Circular and this Tribunal in favour of the respondent which has been negated by the Hon’ble Apex Court in the decision cited. In these circumstances, we hold that extended period of limitation is not invokable. Consequently, demand pertaining to the extended period of limitation which is sought to be demanded from the respondent are set aside. Consequently, the penalties on the respondents are not imposable. - Appeal allowed by way of remand Issues involved:Interpretation of sales tax concession retained by the respondent and its impact on assessable value under Central Excise Act 1944; Applicability of extended period of limitation for demanding duty and imposing penalties.Analysis:The case involved an appeal by the Revenue against impugned orders concerning the treatment of sales tax subsidy as capital receipts by the respondent, leading to a dispute regarding the assessable value of goods sold. The respondents, manufacturers of excisable goods, had retained amounts collected as sales tax from buyers under a tax waiver scheme by the Government of Haryana. The Revenue argued that these amounts should be included in the assessable value of goods sold, making the respondents liable to pay duty. The adjudicating authority upheld the demand for duty, interest, and penalties, which was challenged by the respondents before the Ld. Commissioner (A) citing precedents like Kinetic Engineering Ltd. Vs. CCE Pune, Nagpur-2012. The Revenue contended that the sales tax concession retained should be added to the assessable value based on judgments like Maruti Suzuki India Ltd. Vs. CCE Delhi-2014 and Super Synotex (India) Ltd. Vs. CCE Jaipur-2014, which clarified this issue.The Tribunal noted that the Hon'ble Apex Court had settled the issue, holding that the sales tax concession retained by the respondent must be added to the assessable value. Therefore, the impugned orders were deemed incorrect on merits. However, the respondents raised a contention on the limitation period, referring to a CBEC Circular from 2000 and previous Tribunal decisions supporting their view. The Tribunal acknowledged these precedents but emphasized that the Apex Court's decisions overruled them, making the extended period of limitation inapplicable. Consequently, the demands related to the extended period were set aside, and penalties were deemed non-imposable. The appeals were disposed of by remanding the case to the adjudicating authority to quantify the demand within the limitation period, to be paid by the respondent along with interest within 30 days of quantification.In conclusion, the Tribunal clarified the treatment of sales tax concession retained by the respondent, the impact on the assessable value, and the applicability of the limitation period for demanding duty and penalties. The judgment highlighted the precedence set by the Apex Court, overruling previous interpretations and guiding the quantification and payment process within the specified timeframe.