9911796707
TMI Blog2025 (2) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... ; in terms thereof, the appellant was entitled to tax concession in accordance with the provisions of Rule 28-C for the period from 28.03.2005 to 27.03.2015. On the same day, a revised Entitlement Certificate was issued in Form VAT-G-15 entitling the appellant to tax deferment in accordance with the provisions of Rule 69 of the Haryana Value Added Tax Rules, 2003 (in short "HVAT Rules"). During the impugned period, i.e. FY 2005-2006 and FY 2006-2007, the appellant retained 50% of the sales tax/VAT collected from its customers amounting to Rs.4,42,62,767/-. The allegation of the department is that the amount of Rs.4,42,62,767/- had been received by the appellant from its customers as sales tax/VAT, but is neither actually paid nor actually payable to the Government of Haryana; accordingly, as per the department, this amount is part of the transaction value of the goods sold by the appellant and is, therefore, leviable to Central Excise duty. On this allegation, a show cause notice was issued on 08.06.2007 invoking the extended period of limitation and by following the due process, the learned Commissioner vide the impugned order has confirmed the demand alongwith interest and penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable on goods. In this regard, he refers to the following circulars: a) Circular No. 378/11-98-CX dated 12.03.1998 b) Circular No. 354/81/00-TRU dated 30.06.2000 c) Circular No. 671/62/2002-CX dated 09.10.2002 4.5 The learned Counsel also submits that it is a well settled position in law that guilty intention cannot be presumed on the basis of conjectures and surmises and such intention has to be proved by the department by adducing positive evidence. In this regard, he relies on the following decisions: * Padmini Products vs. Collector of C. Excise - 1989 (43) ELT 195 (SC) * Collector of C. Excise vs. Chemphar Drugs and Liniments - 1989 (40) ELT 276 (SC) 4.6 He also submits that the issue involved in the present case essentially relates to the interpretation of the statute and time, and again it has been held by various courts that in such circumstances extended period of limitation is not invokable. For this, he relies on the following decisions: * Ispat Industries Ltd. vs. Commissioner of Central Excise, Raigad - 2006 (199) E.LT. 509 (Tri. - Mumbai) * Shervani Industrial Syndicate vs. CCE, Allahabad - 2009- TIOL-250-CESTAT-DEL * Singh Brothers vs. CCE, Indor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion scheme allowed by the Haryana State Government and has held as under: "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 Rs. 73,12,73,423/- as VAT from their customers during the periods 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 Sales Tax Act, 1973 shall remain in force with certain modifications. Sub-clause (i) states that, an industrial unit availing the benefit of exemption from the payment of tax may, in the prescribed manner, change-over to deferment of payment of tax for the remaining period. Sub-cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 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, UP, 2007 (210) ELT 161 (SC), and Commissioner of Central Excise, Bangalore vs Meyer Health Care Pvt. Ltd., 2011 (267) E.LT. 145 (S.C.), held that, 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 Excise. In this connection, we find that the Hon'ble Supreme Court examined the issue of retention of collected Sales Tax and its treatment in ascertaining the transaction value for excise purpose. In Commissioner of Central Excise, Delhi-III vs M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 17-3-1998. 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 towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit which was 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 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% b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Industries (India) Ltd (supra). We find that those decisions are not applicable to the facts of the present case as those decisions are related to Maharashtra Vat Act and Gujarat Vat Act, whereas in the case of Maruti Suzuki India Limited (supra), the Hon‟ble Apex Court has examined the provisions of Haryana Vat Act, therefore, those decisions are not applicable to the facts of the present case as the appellant is located in the State of Haryana following the provisions of Haryana Vat Act. 8.------ 9.------ 10.------ 11. As we have already held that the show cause notice dated 4.5.2009 has been issued to the appellant by invoking the extended period of limitation, therefore, the demands for the extended period of limitation in the show cause notice dated 4.5.2009 are also set aside. Remaining demands as per show cause notice dated 4.5.2009 which are within the limitation and the demands as per show cause notice dated 7.5.2010 are confirmed. The appellant is liable to pay interest for the intervening period for these demands. 12. We further find that as the appellant has not collected any duty on the amount of sales tax retained by them, the appellant is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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