TMI Blog2016 (9) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants but not paid or payable to the State Government followed by the various decision of Hon'ble Supreme Court. Invokation of extended period of limitation - Demand for the period April 2003 to June 2006 - SCN issued on 02.07.2007 - Held that:- it is found that there is nothing in the impugned order which examined the party’s submissions against longer period demand. We note that in the present case the correct valuation for Central Excise purpose is in dispute. The dispute is directly relatable to Sales Tax amount paid/payable by the appellants directly relatable to Sales Tax amount paid/payable by the appellants to the State authorities. The Sales Tax amounts collected were all reflected in the invoices issued to the clients. Out of this amount, the appellants retained 50 % based on a scheme announced by the State Government. In this factual matrix, we find that the allegation of fraudulent intent or suppression of fact against the appellants is not sustainable. It is apparent that the issue involved is one of legal interpretation and without a positive evidence for deliberate suppression of fact with intent to evade payment of Central Excise duty invoking the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction value for Central Excise purpose. Duty to an extent of ₹ 11,90,61,237/- was demanded along with the proposal for penalties. The case was adjudicated resulting in the present impugned order. The learned commissioner confirmed the demanded amount and imposed a penalty of equivalent amount of the appellants. Aggrieved by this, the appellants are before us. 2. The learned counsel for the appellants contested the impugned order mainly on the ground that the appellants are eligible for full education of Sales Tax payable by them in terms of the Entitlement Certificate as they have discharged 50% of the deferred tax liability and the remaining 50 % is deemed to have been discharged in full and as such nothing has been retained by the appellants. In other words, it is the plea of the appellants that the lower authority erred in adding up the deferred amount of Sales Tax in the transaction value when the Sales tax liability has been fully settled with payment of 50% of deferred amount. The Submission of the learned counsel can be summarized as below: (a) The definition of transaction Value under Section 4(3)(d) of the Central Excise Act, 1944 requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be applied to Central Excise Act where such fiction has not been recognized specifically. He also supported the demand for extended period and imposition of penalty on the appellants stating that both were done in terms of the provisions of Section 11a and 11AC of the Act. 4. We have haear both sides and examined the appeal records carefully. 5. The main point of dispute is, whether or not the amounts collected by the appellants as Sales Tax from the customers but not paid to the State Sales Tax authorities should be included in the assessable value for the purpose of levy of Central Excise duty. The admitted facts of the case are that, the appellants have been issued with an Entitlement Certificate on 20.10.2003 by the Haryana VAT authorities. The appellants collected an amount of ₹ 73,12,73,423/- as Vat from their customers during the period 2003-04 to 2008-09 and this amount has not been paid to the VAT authorities. The said amount has been retained by the appellants in terms of the applicable regulations of the VAT Rules. Section 61(2)(d) of Haryana Value Added Tax Act, 2003 stipulates that, tax concessions to the industrial units in terms of Haryana General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra) is that, as per the incentive scheme of the Maharashtra Government there is no exemption from payment of Sales Tax, whereas in the present case we find that the exemption scheme of 1973 Act is continued in 2003 Act by the Haryana Government. 7. As correctly noted by the original authority, the implication of deeming provision in a VAT enactment for the purpose of Central Excise valuation has to be examined. The Hon ble Supreme Court In Meghraj Biscuits Industries Ltd. vs commissioner of Central Excise, U.P, 2007 (210) ELT 161 (SC), and C ommissioner of Central Excise, Bangalore vs Meyer Health Care Pvt. Ltd., 2011 (264) ELT held that,145 (SC), deeming fiction of a particular Act cannot be extended to the excise law automatically. Further, the purpose and reason behind the legal fiction, when examining the context, will clearly show that such deeming fiction has limited application to the enactment which contains the same. In the present case, it is the appellants plea that when they pay 50% of VAT (out of 100% collected from the clients) they have fulfilled their VAT liability in full. Hence, full VAT liability should be available for abatement for Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT or turnover tax is payable or paid to the State Government on the transaction, which is regarded as sale, i.e., for transfer of title in the manufactured goods. The amount paid or payable to the State Government towards sales tax, VAT, etc. is excluded because it is not an amount paid to the manufacturer 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the Hon ble Supreme Court, as discussed above. The Hon ble Supreme Court in CCE vs National Engg. Industries, 2015 (320) ELT 27 (SC), again held that post 01.07.2000 in arriving transaction value Sales Tax benefit which as retained by the assessee, would be included while fixing the transaction value . 10. We find while the case on merit is against the appellants, their plea of time bar of that portion of demand beyond normal period has merit. We have examined the impugned order with reference to reasons for upholding the extended period of demand. The original authority had very briefly dealt with the issue. No reasons for confirmation of demand for extended period has been recorded except quoting the Tribunal s order in Emsons Organics Pvt. Ltd., 2011 (267) ELT 263 (Tri.-Del). On perusal of the said order, we find that the same is passed while disposing a stay application and that is only an interim order. We find that there is nothing in the impugned order which examined the party s submissions against longer period demand. We note that in the present case the correct valuation for Central Excise purpose is in dispute. The dispute is directly relatable to Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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