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

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 extended period were set aside, and penalties were deemed non-imposable based on the Apex Court's decisions overruling previous interpretations. The case was remanded to the adjudicating authority to quantify the demand within the limitation period, to be paid by the respondent along with interest within 30 days.

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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.

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