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

Excise duty on retained sales tax: retained amounts under incentive schemes treated as part of transaction value; interest applies.
Recovery of excise duty is triggered where sales tax retained by a manufacturer under a state incentive scheme forms part of the transaction value. The transaction value definition allows deduction of sales tax only if actually paid or actually payable; retained amounts do not qualify and have been treated as chargeable to excise duty. Judicial precedent and a Board circular cited in the discussion support recovery of duty on the retained portion with interest and possible penalties, while the time-bar question was raised but left unresolved in the replies.