Recovery of Excise duty -Reg.

[vinay wakde]

Ours is a manufacturing unit and enjoying benefit of Maharashtra Sales Tax incentive scheme. In the matter, we refer recent case of Commissioner of Central Excise, Delhi III vs. Maruti Suzuki India Limited = 2014 (10) TMI 764 - CESTAT NEW DELHI (2014 VIL 17 SC CE), the CESTAT held that 50% of the Sales Tax collected and retained by the assessed should form part of the transaction value and balance 50% paid to the State Government should be allowed as deduction from the transaction value.

The definition of ‘transaction value’ under Section 4(1)(d) of the Central Excise Act, 1944 (‘the Act’) permits deduction of Sales Tax charged and recovered from buyers from the transaction value only if such Sales Tax is actually paid or is actually payable by the manufacturer on such goods.

In view of the above, kindly let us know whether the Excise duty subsequently recovered from us with Interest and Penalty? time bar period for such recovery?

Regards,

VINAY

AI Summary

Manufacturer Challenges Excise Duty Recovery on Sales Tax Incentives; Cites Maruti Suzuki Precedent Under Central Excise Act, 1944. A manufacturing unit benefiting from the Maharashtra Sales Tax incentive scheme is questioning the recovery of excise duty, including interest and penalties, based on the transaction value definition under the Central Excise Act, 1944. The discussion references a legal precedent involving Maruti Suzuki, where it was ruled that 50% of the sales tax retained by the manufacturer should be included in the transaction value, while the remaining 50% paid to the state can be deducted. Respondents confirm that excise duty is applicable on the retained sales tax amount, referencing relevant Supreme Court judgments and circulars.