We have newly set up a SSI unit in the prescribed area, and enjoy full exemption from payment of sales tax in terms of Section 39 of the West Bengal Sales Tax Act 1994. However, at the same time we are eligible to collect the sales Tax, so exempted, from the buyer and retain the same without paying to the Govt exchequer in terms of Section 37(1) of the said Act which accourding to us is incentive provided by the State Goverment. But we have been issued a demand -cum -show cause notice from the Assistant Commissioner of Central Excise stating that we have contravened provision of section 4 of the Central Excise Act 1994, read under Rules 4,6,8,10,11 & 12 of the Central Excise Rules 2002, and that since we have not paid excise duty on the sales tax amount collected and retained with the intention to evade Central Excise duty, the same is recoverable from us under section 11A of the central Excies Act Act 1994, together with interest and penalty under Rule 25 of the Central Excise Rules 2002.
We thus need your legal advice in the above matter.
CAclubindia
