Ashok Jindal, Judicial Member:— The appellant is in appeal against the impugned order confirming demand of duty of Rs. 3,43,03,116/- along with interest and imposing equivalent penalty.
2. The brief facts of the case are that the appellant is engaged in manufacturing of motor vehicle parts, located in IMT Manesar, Gurgaon. During the course of audit conducted by the Central Excise Audit, in March, 2009, it was observed that the appellant is availing benefit of Sales Tax concession under the Sales Tax Department Scheme. The appellant has retained 50% of the Sales Tax collected by them from their customers, on account of tax concession allowed to them by Entitlement Certificate dated 1.12.2006 issued by the Deputy Excise & Taxation Commissioner, Gurgaon under Rule 69 of the Haryana Value Added Tax Rules, 2003. As per the said certificate, the appellant is entitled for Sales Tax deferment for the period 1.12.2006 to 30.11.2016. Under deferment scheme, 50% of the total Sales Tax payable to the Sales Tax department is retained by the appellant and they are not required to pay this retained amount of Sales Tax to the Sales Tax Department in future. Further, the appellant has been retaining some part of the Sales Tax, collected by them from their customers, on account of tax concessions allowed to them by Entitlement Certificate dated 8.11.2006 for the period December, 2006 to November, 2016. The Revenue asked the appellant to provide the details of the Sales Tax amount retained by them from the date of issue of the Entitlement Certificate dated 1.12.2006 and 8.11.2006 during the last five years. The appellant provided the details for the period 2006-07 to 2008-09 and December 2006 to October 2007 and further from April, 2009 to March, 2010. On the basis of details provided, three show cause notices were issued to the appellant for the period 2006-07 to 2009-10 to demand duty on the amount of Rs. 7,99,45,395/-, Rs. 18,76,83,599/- and Rs. 7,52,16,400/- retained by them as Sales Tax/Vat as per Entitlement Certificate Haryana Vat Department. The matter was adjudicated and it was observed by the adjudicating authority that the demand of Rs. 1,31,39,642/- is for overlapping period and the same has been dropped and remaining demands as proposed in the show cause notices were confirmed along with interest and equivalent penalty was also imposed on the appellant. Aggrieved from the said order, the appeal is before us.
3. Learned Counsel for the appellant submits that the said issue came up before this Tribunal in the case of Uttam Galva Steels Ltd., 2016 (331) ELT 261 (Tri.-Mum.) wherein after considering the decision of Hon'ble Apex Court in the case of Maruti Suzuki India Ltd., 2014 (307) ELT 625 (SC) has held that the amount retained by the appellant as per Entitlement Certificate Haryana Vat Department, no duty is payable, therefore, the appellant is not liable to pay duty. He also relied upon the decision of this Tribunal in the case of Man Industries (India) Ltd., 2017 (6) TMI 419-CESTAT MUMBAI. In alternate, he submits that the issue involved in this case is as to whether the appellant is liable to pay duty was in dispute, therefore, the extended period is not invokable consequently, the penalties are also not imposable on the appellant.
4. On the other hand, learned AR reiterated the findings of the lower authorities in the impugned order.
5. Heard the parties and considered the submissions.
6. Short issue involved in the matter is whether the appellant is liable to pay duty on the amount retained as Sales Tax collected from the customers as per the Entitlement Certificate issued by the Haryana Vat Department or not.
7. We find that the issue came up before the Hon'ble Apex Court in the case of Maruti Suzuki India Limited (supra) wherein the Hon'ble Apex Court held that the amount retained on account of sales tax as per the Entitlement Certificate is to be added in the assessable value. Learned Counsel for the appellant has relied upon the decision of this Tribunal in the case of Uttam Galva Steels Ltd. (supra) and Man 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. We find in this case periodical show cause notices have been issued to the appellant and the demands for the December, 2006 to October 2007 are overlapping by two show cause notices issued to the appellant (a) show cause notice was issued on 3.4.2008 to demand of duty of Rs. 1,31,39,642/- for the period December, 2006 to October, 2007 and (b) show cause notice was issued on 4.5.2009 to demand of duty of Rs. 18,76,83,599/- for the period 2006-07 to 2008-09. As in both the show cause notices, cover the period of December, 2006 to October, 2007 twice. Third show cause notice was issued was issued on 7.5.2010 to demand of Rs. 61,97,831/- for the period 1.4.2009 to 31.3.2010. The adjudicating authority in the impugned order has accepted the plea of the appellant that for the period December, 2006 to October, 2007 is overlapping and observed as under:
2. There is duplicacy of demand for the period December 2006 to October 2007 as two show cause notices covering the same period have been issued. Show cause notice C No. CE-20/R-XI/V/Audit/IAR/Denso/53/09/4021 dated 04.05.2009 covers the period of 2006-07 to 2008-09 and SCN No. CE-20/R-XIV/IAR/Denso/280/0767 dated 3.4.2008 covers the period from December 2006 to October, 2007. Thus, there is overlapping demand for the period from December 2006 to October, 2007 which the noticee has pointed out as amounting to Rs. 1,31,39,642/- on an amount of Rs. 7,99,45,395.00. Accordingly, demand to the extent of Rs. 1,31,39,642.00 is liable to be dropped.
9. In view of the above, the extended period is not invokable as the issue whether the appellant is liable to pay duty on the amount retained by them collected on account of sales tax from their customers as per Entitlement Certificate issued by the Haryana Vat department was in dispute and the same has been settled in 2014 in the case of Maruti Suzuki India Limited. In that circumstance, we hold that the extended period is not invokable.
10. We further find that as per observation made by the Ld. Commissioner in the impugned order, the demand of Rs. 1,31,39,642/- has been dropped which is not demandable form the appellant by way of show cause notice dated 3.4.2008. Although, the Commissioner has dropped the demand of Rs. 1,31,39,642/- but from his observation it is not clear that the demand pertained to which show cause notice has been drooped by him. His only observation is that the demand for the period December 2006 to October, 2007 has been dropped. From reading of the paragraph 25(2) of the impugned order which is incorporated hereinabove shows that the overlapping demand as per show cause notice dated 3.4.2008 has been dropped. As the order of the Ld. Commissioner is not specific to drop the demand of show cause notice dated 4.5.2009, in that circumstance, the benefit of doubt goes in favour of the appellant, therefore, we hold that the Commissioner himself dropped the demand of Rs. 1,31,39,642/- raised against the appellant by way of show cause notice dated 3.4.2008.
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 to cum duty benefit.
13. As the extended period of limitation is not invokable as the issue was pending before the Apex Court and was settled in the case of Maruti Suzuki India Ltd., therefore, no penalty is imposable on the appellant.
14. In view of above observations, the following order is passed:
(a) The demands as per show cause notice 3.4.2008 are dropped which have already been dropped by the ld. Commissioner.
(b) The demands by invoking the extended period of limitation as per show cause notice dated 4.5.2009 are set aside
(c) The demands within the normal period as per show cause notices dated 4.5.2009 and 7.5.2010 are confirmed.
(d) The appellant is entitled for cum-duty benefit.
(e) No penalty is imposable on the appellant
15. The appeal is disposed of in the above terms.