NATIONAL ENGG. INDUSTRIES Vs. CCE

JUDGEMENT

(1.) THE Commissioner of Central Excise, Jaipur has confirmed the duty demand of Rs. 55,60,321/ - on the ground that the above amount of duty was required to be paid by the assessee who are engaged in the manufacture of taper roller bearings as they were charging and collecting excess amount of Central Sales Tax from the buyers as shown in the invoices, but not paying the same to the Government account and therefore, the amount was includible in the assessable value of goods manufactured by the assessees for the purpose of computation of Central Excise duty. She has also imposed a penalty of equal amount upon the appellants in terms of Section 11 AC of the Central Excise Act in addition to ordering recovery of interest on the duty amount under Section 11AB of the Central Excise Act.

(2.) WE have heard both sides. We find that the contention of the appellants that it was not a case of partial exemption in respect of sales of bearings in the course of inter -state trade under Notification No. F4(72) FD Gr. IV/81 -18 dated 6.5.86, but an incentive scheme to promote inter sales trade has been required for the reason that the assessment orders passed by the Sales Tax Authorities referred to partial exemption. However, the learned counsel for the appellants have showed as the orders dated 12.7.95 of the Rajasthan Sales Tax Tribunal, Ajmer in the case of Mangalam Cement Ltd. Vs. The Commercial Taxes Officer where the Tribunal has interpreted the notification as being in the nature of an incentive to a dealer to increase the inter -State sales and decrease the quantum of branch transfer in order to argument the revenue from such sales. The being so, the excess amount of CST is not required to be included in the assessable value of bearings manufactured by the appellant herein during the relevant period. We, therefore, set aside the impugned order and allow the appeal.