TaxTMI 
TaxTMI 
2023 (8) TMI 611
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.... was allowed to keep the VAT chain intact. Therefore, the Appellant did not remit 99% of the AVAT collected by them. 2. The Appellant was issued a Show cause Notice dated 28/07/2017 by the Assistant Commissioner of GST & Central Excise, demanding Central Excise duties, Education Cess and S&HE Cess amounting to Rs.7,76,384/- in terms of proviso to Section 11A(1) of the Central Excise Act, 1944, short paid during the period August 2012 to January 2016 by way of undervaluation of goods by non-inclusion of the VAT amount collected and retained under the Assam value Added Tax Rules, 2005, in violation of Section 4(3)(d)of the Central Excise Act, 1944. The Notice was adjudicated vide Order-in-Original dated 01.12.2017, confirming the demands of duties along with interest and equal amount of duty as penalty. On appeal, the Commissioner (Appeals) upheld the demands of duties, interest and penalty, vide his O-I-A dated 21.03.2018. Aggrieved against the impugned order, the Appellant has filed the present appeal. 3. In their grounds of appeal the Appellant stated that there was no unauthorized collection or retention of AVAT by them. They have only retained the amount of AVAT to the extent ....
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....0% of the Central Excise Duty. 5. While enjoying the benefits of notification No. 20-/2007-CE, dated 25.04.2007, the Appellant's unit was audited for the period from January 2012 to March on 06.07.2014. During the course of audit, the total amount of VAT Remission retained by the Appellant was collected by the Audit team, from the documents submitted by them and the Central Excise duty payable thereon was worked out as Rs.7,57,346/-, Education Cess Rs.12,692/- and SHE Rs.6,346/- respectively and demand Notice dated 28.07.2017 was issued, which resulted in the confirmation of the demands in the impugned order. Thus, they have not suppressed any information from the department. Accordingly, extended period not invocable in this case and penalty is also not imposable. In view of the above, they prayed for setting aside the impugned order. 6. The Ld.A.R. submitted that the issue has already been decided by the Hon'ble Supreme Court in the case of Super Synotex (India) Ltd. Vs CCE, Jaipur reported in 2014 (301) ELT 273, wherein it has been held that the sales tax concession retained by the assesses is required to be added in the assessable value for the purpose of levy of Central Exci....
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....th the Sales Tax Deptt. (on a monthly or quarterly basis), the assessee deposits only the net amount of sales tax after deducting set off/rebate admissible, either in full or in part, on the sales tax/purchase tax paid on the raw materials during the said month/quarter. The sales tax set off in such cases, therefore, does not work like the central excise set off notifications where one to one relationship is to be established between the finished product and the raw materials and the assessee is allowed to charge only the net central excise duty from the buyer in the invoice. The difference between the set off operating in respect of central excise duty and that for sales tax can be best illustrated through an example. If the sales tax on a product 'A' of value Rs. 100/- is, say 5% and the set off available in respect of the purchase tax/sales tax paid on inputs going into the manufacture of the product is, say, Re. 1/-, then the sales tax law permits the assessee to recover sales tax of Rs. 5/-. But while paying to the sales tax deptt. be deposits an amount of Rs. 5 - 1 = Rs. 4 only. On the central excise duty payable would have been Rs. 5 - 1 = Rs. 4, in view of the set off notif....
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....facturer towards the price, but an amount paid or payable to the State Government for the sale transaction, i.e., transfer of title from the manufacturer to a third party. Accordingly, the amount paid to the State Government is only excludible from the transaction value. What is not payable or to be paid as sales tax/VAT, should not be charged from the third party/customer, but if it charged and is not payable or paid, it is a part and should not be excluded from the transaction value. This is the position after the amendment, for as per the amended provision the words "transaction value" mean payment made on actual basis or actually paid by the assessee. The words that gain signification are "actually paid". The situation after 1-7-2000 does not cover a situation which was covered under the circular dated 12-3-1998. Be that as it may, the clear legislative intent, as it seems to us, is on "actually paid". The question of "actually payable" does not arise in this case. 23. In view of the aforesaid legal position, unless the sales tax is actually paid to the Sales Tax Department of the State Government, no benefit towards excise duty can be given under the concept of "trans....
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....xpressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law." 25. The legal position has been reiterated in the State of Tamil Nadu and Anr. v. India Cement Ltd. - (2011) 13 SCC 247. Therefore, reliance placed on the circular dated 9-10-2002 by the Tribunal is legally impermissible for two reasons, namely, the circular does not so lay down, and had it so stated that would have been contrary to the legislative intention. 26. In view of the aforesaid analysis, we are of the considered opinion that the assessees in all the appeals are entitled to get the benefit of the circular dated 12-3-1998 which protects the industrial units availing incentive scheme as there is a conceptual book adjustment of the sales tax paid to the Department. But wi....
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.... submissions, the Appellant stated that their unit was audited for the period from January 2012 to March 2014, on 06.07.2014. During the course of audit, the total amount of VAT Remission retained by them was collected by the audit team, from the documents submitted by them and the Central Excise duty payable thereon was worked out. Also, the entire issue was known to the department. They were granted eligibility certificate for availing the incentives under the Industrial Policy of Assam 2008 and for claiming the exemption of tax under Assam Industries (Tax Exemption) Scheme 2009. As per terms of the above remission scheme they were entitled to retain with it 99% of the VAT collected and pay only 1% to the State government. The department was aware that they were availing the Scheme and retaining 99% of the VAT collected. Thus, they have not suppressed any information from the department. Accordingly, they contended that extended period not invocable in this case and penalty is also not imposable. 12. We find merit in the argument of the Appellant. The Appellant has not suppressed any information from the department. There were decisions of the Tribunals that the sales tax ....