2017 (1) TMI 1277

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....recovery of Central Excise duty short paid during the period April, 2003 to October, 2008. The first show cause notice dated 04.11.2008 was issued covering period from April 2005 to December 2007; the second show cause notice dated 03.12.2008 was issued covering period from January 2008 to October 2008. The issue in brief is that the appellant have not paid full amount of VAT received on sale of finished goods from the buyer to the sales tax department. They retained certain amount as per the scheme announced by the Punjab Government. The proceedings initiated against the appellant to demand differential central excise duty is on the ground that the retained amount is not actually paid as VAT to Government and hence will be additional consi....

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....ct, the Board also clarified on this issue vide circulars dated 12.03.1998 and 09.10.2002. In the case of Maruti Udyog Limited vs. CCE, Delhi-III reported in 2004 (166) ELT 360 (Tri. Del.), the Tribunal held that deduction is permissible of the full sales tax chargeable and the fact that there is an adjustment between the assessee and the State Government on payment of sales tax does not change the legal position. In Super Synotex (India) Ltd. vs. CCE, Jaipur reported in 2003 (160) ELT 859 (Tri. Del.), the tribunal held that assessee is eligible for deduction of sales tax charged from the buyers and no restricted to the amount paid to the Government. Similar view was taken by the Tribunal in Pratap Rajasthan Spl. Steel Limited Vs. CCE, Jaip....

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....t and the consequential imposition of penalty also cannot be held to be defensible. 7. Hence, considering the above position, we are of the view that the appellant s plea of bona-fide belief and non-existence of elements of fraud, collusions, suppression etc. on their part merits consideration. We find the show cause notice dated 04.11.2008 did not elaborate the reason for invoking the extended period. The impugned order confirms the demand for longer period. We find the conclusion and the analysis made in the original order on this issue as unsustainable. The Hon ble Supreme court in the case of Jaiparakash Industries Ltd. vs. CCE, Chandigarh reported in 2002 (146) ELT 481 (SC) held that if there were divergent views there could be bona....