Sales tax concession retained by assessee must be included in assessable value for Central Excise duty levy

CESTAT Kolkata held that sales tax concession retained by assessee must be included in assessable value for Central Excise duty levy, following SC precedent in Super Synotex case. However, extended period of limitation was not invocable as adjudicating authority failed to establish suppression, with VAT details disclosed in audited financial statements. Penalty under Section 11AC was set aside due to lack of proper findings. Matter remanded for duty calculation for normal limitation period with consequential relief.

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Issues involved: The appeal was filed against the impugned Order-in-Original confirming a demand, dropping the demand raised by invoking the extended period, and imposing a penalty under Section 11AC of the CEA, 1944.

Summary:

Issue 1 - Demand Confirmation and Penalty Imposition:
The Order-in-Original confirmed a demand for Rs.19,75,083/- for the normal period of limitation, dropped the demand raised under the extended period, and imposed a penalty under Section 11AC of the CEA, 1944. The Appellant appealed against this decision, arguing that the duty payable for the normal period should be calculated by treating the amount collected as cum-duty. The Appellant also contended that no duty was collected separately from customers and that there was no suppression involved, hence penalty under Section 11AC should not be imposed.

Issue 2 - Sales Tax Concession and Assessable Value:
The issue involved in the appeal was the includability of the sales tax concession retained by the Appellant in the assessable value for the levy of Central Excise duty. The Appellant argued that the sales tax concession retained should not be added to the assessable value based on certain decisions. However, the Tribunal held that based on the decision of the Hon'ble Supreme Court in the case of Super Synotex (India) Ltd. Vs CCE, Jaipur, the sales tax concession retained by the Appellant is required to be added in the assessable value for the levy of Central Excise duty.

Decision:
The Tribunal observed that the Appellant agreed to pay duty for the normal period but contended that the amount collected should be considered as cum-duty. The Tribunal agreed with the Appellant's contention, stating that since no duty was collected separately, the amount collected should be treated as inclusive of duty. The Tribunal also found that the penalty imposed under Section 11AC was not justified as there was no proper finding for its imposition. Referring to a Circular issued by the Board, the Tribunal held that the extended period was not invocable in this case, and therefore, the penalty under Section 11AC was set aside. The appeal was partially allowed, with the Appellant being liable to pay duty for the normal period of limitation, and the penalty under Section 11AC being set aside.

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