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October 2015

[2015 (322) ELT 772 (S.C.) Greaves Ltd vs. Commissioner of Central Excise and Customs, Aurangabad

By Puloma Dalal
Jayesh Gogri
Mandar Telang Chartered Accountants
Reading Time 1 mins
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Extended period cannot be invoked for the period prior to the issue of clarificatory circular by CBEC

Facts
CBEC, vide its circular dated 30/10/1996 clarified the manner of valuation of captively consumed goods. Demand was raised on the Appellants for non-inclusion of certain costs in arriving at the value for captive consumption for the period 1993-94 to 1997 invoking extended period of limitation. It was argued that since there was no misdeclaration or misstatement, the extended period was not invokable.

Held:
The Hon’ble Supreme Court relying on the decision of Commissioner of Central Excise, Ahmedabad vs. Asarwa Mills [2015 (319) ELT 216 (S.C.) held that the Appellant cannot be faulted with for adopting a valuation mechanism prior to the issuance of the clarificatory circular. Accordingly, extended period cannot be invoked. Moreover, the demand for the normal period was also set aside as the tax effect thereof was negligible.

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