Sales tax concession retained by appellant must be included in assessable value but extended limitation period not applicable

CESTAT Kolkata held that sales tax concession retained by appellant must be included in assessable value for Central Excise duty levy, following SC precedent in Super Synotex case. However, extended period of limitation was deemed non-invocable as appellant had relied on conflicting tribunal decisions and disclosed VAT details in audited accounts, showing no suppression. Penalty under Section 11AC was set aside as adjudicating authority failed to establish positive act of suppression. Board Circular 1063/2/2018 supported non-invocation of extended period in such cases. Appeal allowed partially - duty confirmed for normal period but penalty removed.

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Issues involved:
The issues involved in the present case are the includability of sales tax concession retained by the Appellant in the assessable value for the levy of Central Excise duty and the imposition of penalty under Section 11AC of the CEA, 1944.

Includability of Sales Tax Concession:
The Appellant appealed against the Order-in-Original confirming a demand, while dropping the demand raised under the extended period but imposing a penalty. The Appellant argued that as per the decision in Super Synotex (India) Ltd. Vs CCE, Jaipur, the sales tax concession retained should be added in the assessable value for Central Excise duty. The Appellant contended that the duty payable for the normal period should be calculated by treating the amount collected as cum-duty. The Tribunal agreed with the Appellant, holding that the sales tax concession retained must be included in the assessable value for Central Excise duty.

Payment of Duty and Penalty Imposition:
The Appellant agreed to pay duty for the normal period but argued that the duty payable should be calculated by treating the amount collected as inclusive of duty. The Tribunal concurred with the Appellant's stance, stating that since the duty was not separately collected from customers, the amount collected should be considered inclusive of duty. Regarding the penalty imposed under Section 11AC of the CEA, 1944, the Tribunal found that the Appellant had not suppressed any information and had relied on previous Tribunal decisions. The Tribunal held that the penalty imposed was not justifiable as the Appellant could not be faulted for not including the sales tax concession in the assessable value.

Circular and Extended Period:
Referring to Circular No. 1063/2/2018-CX, the Tribunal noted that the Board clarified that the extended period should not be invoked in cases where no positive act of suppression was shown. The Tribunal found that the Adjudicating Authority failed to demonstrate any suppression by the Appellant. Relying on the Circular, the Tribunal concluded that the extended period was not applicable in this case, leading to the setting aside of the penalty under Section 11AC of the CEA, 1944.

Decision and Disposal:
The Tribunal partially allowed the appeal, directing the Appellant to pay duty for the normal period, considering the amount collected as cum-duty. The penalty imposed under Section 11AC of the CEA, 1944 was set aside. The appeal was disposed of by remanding for the calculation of duty payable for the normal period, with any consequential relief as per law.

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