2015 (8) TMI 1319 - AT - Central Excise

Valuation - Inclusion of amount of sales tax concession retained by the respondent in the assessable value of goods sold in terms of section 4(3)(d) of Central Excise Act 1944 - Held that - the issue has been settled by the Hon ble Apex Court in the Case of Maruti Suzuki India Ltd. Vs. CCE Delhi 2014 (9) TMI 229 - SUPREME COURT and Super Synotex (India) Ltd. Vs. CCE Jaipur 2014 (3) TMI 42 - SUPREME COURT wherein Hon ble Apex Court has held that amount of sales tax concession retained by the respondent is required to be added in the assessable value. Therefore issue is no more res integra and we hold that the impugned orders are not correct on merits. Invokation of extended period of limitation - Demand and imposition of penalty - amount of sales tax concession retained by respondent - Held that - during the relevant period there was CBEC Circular dated 30.06.2000 which provides that any amount of concession on sales tax retained by the respondent is not required to be added in the assessable value and there are certain judicial pronouncements of this Tribunal holding the same view in the case of Kinetic Engineering Ltd. Vs. CCE Pune Nagpur 2012 (6) TMI 168 - CESTAT MUMBAI and Life Long India Pvt. Ltd. Vs. CCE Delhi 2012 (3) TMI 349 - CESTAT NEW DELHI . As there were view taken by the CBEC Circular and this Tribunal in favour of the respondent which has been negated by the Hon ble Apex Court in the decision cited before us. Therefore the extended period of limitation is not invokable. Consequently demand pertaining to the extended period of limitation which is sought to be demanded from the respondent are set aside. Consequently the penalties on the respondents are not imposable. - Appeals disposed of by way of remand

Summary

Issues:
- Whether the amount of sales tax concession retained by the respondent should be added to the assessable value of goods sold.
- Whether the extended period of limitation can be invoked for demanding duty and imposing penalties.

Analysis:

1. Issue of Assessable Value:
The case involved a dispute regarding the treatment of sales tax subsidy received by the respondent. The Revenue contended that the amount retained by the respondent as sales tax concession should be added to the assessable value of goods sold, making them liable to pay duty on that amount. The adjudicating authority upheld this view and imposed penalties. However, the respondent argued that based on previous Tribunal decisions and a CBEC Circular, they were not liable to pay duty on the sales tax concession amount. The Tribunal referred to the decisions of the Hon'ble Apex Court in the cases of Maruti Suzuki India Ltd. and Super Synotex (India) Ltd., where it was held that such amounts should be added to the assessable value. Consequently, the Tribunal ruled in favor of the Revenue, stating that the impugned orders were incorrect on merits.

2. Issue of Extended Period of Limitation:
The respondents also contested the demand for duty and penalties on the grounds of limitation. The Tribunal noted the existence of a CBEC Circular from 2000 and previous Tribunal decisions supporting the view that the sales tax concession amount need not be added to the assessable value. However, the Hon'ble Apex Court's decisions overruled these views. In light of this, the Tribunal held that the extended period of limitation could not be invoked. Therefore, the demands related to the extended period were set aside, and penalties on the respondents were deemed not imposable. The Tribunal directed the adjudicating authority to quantify the demand within the limitation period, which the respondent was required to pay within 30 days along with interest.

In conclusion, the Tribunal disposed of the appeals by remanding the case to the adjudicating authority for quantifying the demand within the limitation period. The judgment clarified the treatment of sales tax concession amounts in the assessable value of goods sold and addressed the issue of invoking the extended period of limitation for demanding duty and imposing penalties.