C.C.E. Delhi-Iii vs M/S. Danisco India Pvt. Ltd

[Arising out of Order-in-Appeal No. 354 -358/SVS/GGN/2013 dated 23.07.2013 passed by the Commissioner of Central Excise (Appeals), Gurgaon].

For approval and signature:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.E. Delhi-III .Appellants

Gurgaon

Vs.

M/s. Danisco India Pvt. Ltd. .Respondents

Appearance:

Shri M.S. Negi, DR for the Appellants

Shri Punit Agarwal, Advocate for the Respondents

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 19.08.2015

FINAL ORDER NO. 52738/2015-EX(DB)

Per Ashok Jindal:

Revenue is in appeal against the impugned order.

2. The facts of the case are that respondent is manufacturer of excisable goods and registered with Central Excise department as well as Haryana Sales Tax Act, 1972. During the course of audit, it was observed that the appellant has collected Sales Tax from the buyers / customers at the prevailing rate of service tax but as per concessional scheme of Haryana Sales Tax department pay 50% of the sales tax to the Haryana State and detain 50% as per the tax supplier scheme of Government of Haryana. As per the scheme, if the assessee pays 50% of the Sales Tax collected in one go in advance, same shall be deemed to have paid the full sales tax to the Haryana Government. The case of the Revenue is that amount retained by the respondent who form part of the Income on account of sales tax are required to be added in the assessable value of the goods sold by them in terms of Section 4 (3) (d) of Central Excise Act, 1944. Therefore, respondents are liable to pay duty on the amount of sales tax retained by the respondent. The show cause notice was issued to the respondent by extending the period of limitation and demand of duty and also penalty. The adjudicating authority confirmed the demand of duty on account of sales tax concession retained by the respondent along with interest and penalty was also imposed. The said order was challenged by the respondents before the learned Commissioner (Appeals).

3. The respondents are manufacturer of excisable goods and registered with Central Excise department as well as Haryana Sales Tax Act 1972. During the course of audit it was observed that some amount were shown as capital receipts as sales tax subsidy from the Government of Haryana. Further, it was revealed that amount of Sales Tax has been collected from the buyers / customers and retained by the respondent as per the tax waiver scheme of the Government of Haryana. Therefore, it was alleged that the amount retained by the respondents should form part of income on account of sale of goods and required to be added in the assessable value of the goods sold by them in terms of section 4(3)(d) of Central Excise Act 1944. Therefore, the respondents are liable to pay duty on the amount of sales tax concession retained by them. The show cause notices were issued by invoking extended period of limitation to demand duty and also for imposition of penalty. The adjudicating authority confirmed the demand of duty on the amount of sales tax concession retained by the respondent along with interest and penalty were also imposed. The said orders were challenged by the respondent before the Ld. Commissioner (A) who relied on the decision of this Tribunal in the case of Kinetic Engineering Ltd. Vs. CCE Pune, Nagpur-2012 (283) ELT229 (Tri-Mum). The respondent are not liable to pay duty or to be added in the assessable value the amount of sales tax concession retained by them. Aggrieved from the said orders Revenue is before us.

4. Heard the parties. Considered the submission.

5. The issue has been settled by the Honble Apex Court in the Case of Maruti Suzuki India Ltd. Vs. CCE Delhi-2014 (307) ELT 625 (SC) and Super Synotex (India) Ltd. Vs. CCE Jaipur-2014 (301) ELT 273 (SC) wherein Honble 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. In these circumstances, we hold that the impugned orders are not correct on merits.

6. The contention of the learned Counsel of appellant is that if they pay 50% of the sales tax to the Haryana Government in one go, same shall be deemed to be 100% payment of sales tax. This concession has been granted by Haryana Sales Tax department but it is a fact that the respondent has retained 50% of the Sales tax collected by them from the customers with them as an additional consideration of the goods sold to the buyers. In that circumstances, the issue is squarely covered by the decision of Honble Apex Court in the case of Maruti Suzuki India Ltd, cited (supra).

7. The respondents also contested the issue on limitation. We find 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. (Supra) and Life Long India Pvt. Ltd. Vs. CCE Delhi-2013 (292) ELT 88 (Tri-Del). As there were view taken by the CBEC Circular and this Tribunal in favour of the respondent which has been negated by the Honble Apex Court in the decision cited before us today. In these circumstances, we hold that 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.

8. With these observations, the appeals are disposed of by way of remand with the direction to the adjudicating authority to quantify the demand pertains to period within limitation which shall be paid by the respondent within 30 days of quantification along with interest for the intervening period.

(operative part of the order pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

( B Ravichandran )

Member(Technical)

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