2018 (10) TMI 961 - AT - Central Excise

Tribunal rules in favor of appellant on VAT, deems demand unsustainable due to limitation period.

M/s HPL Electric and Power Pvt. Ltd. Versus CCE, Delhi-I

M/s HPL Electric and Power Pvt. Ltd. Versus CCE, Delhi-I - TMI Issues:1. Whether the amount retained by the appellant on account of VAT concession given by the Haryana State Government should be added to the assessable value.2. Whether the demand raised against the appellant is sustainable due to the invocation of the extended period of limitation.Analysis:1. The appellant appealed against a confirmed demand on account of the rebate given by the Haryana State Government under Rule 28-C of The Haryana General Sales Tax Rules, 1975. The Revenue contended that the amount retained by the appellant on account of VAT concession should be added to the assessable value. The Tribunal referred to a previous decision by the Hon’ble Apex Court in the case of Maruti Suzuki India Ltd., where it was held that such retained amounts are required to be added to the assessable value. Consequently, on merits, the Tribunal found that the appellant had no case in this regard.2. The demand in question pertained to the period 2001-2004 & 2005, with a show cause notice issued on 30.03.2007 invoking the extended period of limitation. The Tribunal considered a circular dated 16.02.2018, which referenced a decision of the Hon’ble High Court of Punjab & Haryana in the case of Microtek Forgings. The circular highlighted that the High Court had accepted the Apex Court's judgment in cases involving sales tax concession retained by assesses. The High Court had ruled that since there was no clarity on the issue, the extended period of limitation could not be invoked. Therefore, the Tribunal held that the demand was not sustainable due to the invocation of the extended period of limitation.In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, with consequential relief, if any.