Extended limitation for duty demand rejected where prevailing circular and tribunal rulings protected the assessee's treatment of sales tax concession.

The extended period of limitation could not be invoked for duty demand on sales tax concession retained by the assessee because a prevailing CBEC circular dated 30.06.2000 and earlier Tribunal rulings treated such concession as excludible from assessable value, so the assessee could not be faulted for its position. The subsequent reversal of that view by the Supreme Court did not, for the relevant period, justify alleging suppression or invoking the extended limitation period. As the demand was time-barred on that basis, the consequential penalty also could not be sustained.

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Issues: Whether the extended period of limitation could be invoked for demand of duty on the sales tax concession retained by the assessee and, consequently, whether penalty could be sustained.

Analysis: The prevailing CBEC circular dated 30.06.2000 stated that sales tax concession retained by the assessee was not required to be added to the assessable value, and earlier Tribunal decisions had taken the same view. In that background, the assessee could not be treated as having acted at fault. The later reversal of that position by the Supreme Court did not by itself justify invocation of the extended limitation period for the relevant period.

Conclusion: The extended period of limitation was not invokable, and the consequential penalty could not be sustained. The appeal failed.

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