2025-VIL-2190-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Inclusion of Sales Tax/VAT Concession in assessable value for Central Excise Duty - The appellant is engaged in the manufacture of UPVC Pipes, Water Storage Tanks and allied products. It was granted a certificate of eligibility by the Assam State Government under the Industrial Policy of Assam, 2003 and the Assam Industries (Sales Tax Concession) Scheme, 1997, which allowed it to avail sales tax/VAT exemption in the form of remission for a period of 7 years. The Department issued a show cause notice alleging that the appellant had failed to include the 99% of the Value Added Tax retained by it as remission under the Assam Industries (Tax Remission) Scheme, 2005 in the assessable value for the purpose of payment of central excise duty during the period from May 2009 to March 2010 - Whether the 99% of the VAT retained by the appellant as remission under the State Government's scheme is required to be included in the assessable value for the purpose of payment of central excise duty - HELD - The issue regarding the includability of sales tax/VAT concession retained by the assessee in the assessable value for the purpose of levy of central excise duty was settled by the Supreme Court in the case of Commissioner of Central Excise v. Super Synotex (India) Ltd., wherein the Court held that unless the sales tax/VAT is actually paid to the concerned governments or statutory authorities, no benefit towards excise duty can be claimed under the concept of transaction value as envisaged under Section 4 of the Central Excise Act, 1944 and such, is not excludible - Further, the extended period of limitation under Section 11A(4) of the Central Excise Act, 1944 cannot be invoked in the present case as the appellant had not suppressed any material facts from the Department. The Department was aware of the appellant availing the sales tax/VAT remission scheme and the issue was mired in litigation during the relevant period, with conflicting decisions by the Tribunal. Therefore, no mens rea could be attributed to the appellant for not including the remitted amount in the assessable value - The Tribunal also relied on the Board's Circular No. 1063/2/2018-CX, which clarified that the extended period is not invocable in such cases - The entire demand raised against the appellant and the penalty imposed on the appellant is set aside - The appeal is allowed
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