Extended period cannot be invoked for the period prior to the issue of clarificatory circular by CBEC

Greaves    Ltd   vs. Commissioner   of  Central    Excise   and   Customs, Aurangabad. 2015 (322) ELT 772 (s.c.) 

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 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.