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2016 (2) TMI 284 - CESTAT NEW DELHI

2016 (2) TMI 284 - CESTAT NEW DELHI - TMI - Sales tax permissible for deduction for valuation under Central Excise Law - Held that:- In the present case, we find the whole issue cropped up during the course of scrutiny of purchase invoices by the audit party and certain ledger accounts maintained by the appellants. It is not disputed that the present demand arose because of the difference between the sales tax amount collected by the appellant from the buyer and actually paid to the State Govern .....

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n of sales tax, held that the issue involved bonafide dispute as requires interpretation of valuation provisions and no extended period can be invoked.

Considering the above discussion, we are of the opinion that while the appellants are liable to pay the Central Excise duty as per the valuation determined in the impugned order the demand for extended period cannot be sustained. Accordingly, the penalty on the appellants is also set aside. As such, the appeal is partly allowed in the .....

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records by Audit, the Revenue initiated proceedings against the appellant for 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 .....

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learned Counsel for the appellant Shri K.K. Anand submitted that on merits the case has been held against the appellant in view of Hon'ble Supreme Court's decision in CCE Jaipur - II vs. Super Synotex (India) Ltd. reported in 2014 (301) E.L.T. 273 (S.C.) . Hence, they are not contesting on the merits of the valuation and consequent demand. The only point of submission made by the learned Counsel is on the time bar aspect of first demand dated 04/11/2008. This demand covered the period fr .....

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that the demand for the full period is rightly confirmed alongwith penalties. 5. We have heard both the sides and examined appeal records. On the merits of the case, regarding quantum of sales tax permissible for deduction for valuation under Central Excise Law, has been settled by the Hon'ble Supreme Court in the case of CCE, Jaipur - II vs. Super Synotex (India) Ltd. (supra) and in Maruti Suzuki India Ltd. - 2014 (307) E.L.T. 625 (S.C.) . The appellants have no case on merits. This has be .....

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subject matter of interpretation and decision by the Tribunal in various cases. In fact, 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) E.L.T. 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 p .....

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ty has been dealt with by the Tribunal. The Board vide Circulars dated 11/01/1994, 01/07/2002 and 09/10/2002 also issued clarifications. These clarifications were issued after representations from the trade and on due consultation with Ministry of Law etc. 6. The above discussion will show that the deduction of sales tax amount in Central Excise value has been a subject matter of dispute and interpretation during the relevant time. The Hon'ble Apex court settled the matter in the decisions m .....

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enefit of the amount "actually paid" to the Department, i.e. 25%. Needless to emphasise, the set off shall operate only in respect of the amount that has been paid on the raw material and inputs on which the sales tax/purchase tax has been paid. That being the position the adjudication by the Tribunal is not sustainable. Similarly the determination by the original adjudicating authority requiring the assessees to deposit or pay the whole amount and the consequential imposition of penal .....

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