COMMISSIONER OF CENTRAL EXCISE GURGAON II Vs. HONDA MOTORCYCLE & SCOOTERS INDIA PVT LIMITED, THROUGH ITS MANAGING DIRECTOR

JUDGEMENT

(1.) The delay in refilling the appeal is condoned.

(2.) This appeal has been filed by the appellant-revenue under Section 35G of the Central Excise Act, 1944 (in short, "the Act") against the order dated 5.8.2016, Annexure A.5 passed by the Customs, Excise and Service Tax Appellate Tribunal, Chandigarh Bench (in short, "the Tribunal") in Appeal No.E/4001/2012, claiming following substantial questions of law:-

(3.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The respondent-assessee M/s Honda Motorcycle and Scooters India Private Limited is engaged in the manufacture of excisable goods falling under the first Schedule to the Central Excise Tariff Act, 1985. It is availing CENVAT credit of the duty paid on inputs and capital goods used in the manufacture of final products under CENVAT Credit Rules, 2002/2004. It is holding VAT registration number as required under the relevant rules. During the course of audit, it was noticed that it had been retaining 50% of the sales tax collected by it from its customers on account of tax concession allowed to it under Rule 69 of the Haryana Value Added Tax Rules 2003. Under the deferment scheme, 50% of the total sales tax payable to the sales tax department was to be retained by it on the basis of entitlement certificate issued by the Haryana Government and it was not required to pay this retained amount of sales tax to the sales tax department in future. Accordingly, show cause notices dated 12.5.2009 were issued to the assessee for recovery of central excise duty not paid on the amount retained by the parties as this amount forming part of the income was on account of sales of the goods and was liable to be added in the value of the goods for payment of duty. The said show cause notices were adjudicated by the Commissioner of Central Excise, Delhi III, Gurgaon and vide order dated 27.9.2012, Annexure A.4, the demands were confirmed alongwith interest, and penalty equal to the duty amount was also imposed on the party. Aggrieved by the order, the respondent-assessee filed an appeal before the Tribunal. Vide order dated 5.8.2016, Annexure A.5, the Tribunal decided the case on merit in favour of the department and held that amount of sales tax concession retained by the respondent was required to be added to the transaction value but set aside the demand pertaining to the extended period of limitation and remanded the matter to the adjudicating authority with a direction to quantify the demand pertaining to period within limitation. Hence the instant appeal by the appellant-revenue.