1987 (2) TMI 63 - SC - Central Excise

Whether the period of limitation under the old provision having expired the five year rule which has been applied was not available to be applied? Held that - Undoubtedly, the rule is intended to relate back and cover a period of five years from the date jurisdiction under the rule is invoked. The provision is, therefore, retrospective in operation. It is not the stand of the learned Counsel for the appellant that only when a period of five years has elapsed from the date of introduction of the rule, jurisdiction under the rule can be exercised in respect of that preceding period of five years. Once the rule comes into existence and jurisdiction under the rule is invoked, it has got to cover a period upto five years preceding the date of issue of notice. The Tribunal has endorsed such action of the departmental authorities. The plea of limitation has no force. Appeal dismissed.

Issues:
- Interpretation of Central Excises and Salt Act, 1944 regarding handling charges for computation of duty
- Application of valuation rules under Section 4 of the Act
- Statutory provisions for limitation period under Rule 9 and Rule 10
- Determination of pre-manufacturing costs and their inclusion in assessable value
- Justification for the longer limitation period based on suppression of information
- Retrospective application of the five-year limitation rule

Interpretation of Central Excises and Salt Act, 1944 regarding handling charges for computation of duty:
The case involved an appeal under Section 35-L of the Central Excises and Salt Act, 1944 against the decision of the Customs, Excise and Gold (Control) Appellate Tribunal. The appellant manufactured aluminum wire rods from duty paid aluminum ingots and collected handling charges from customers. The Revenue contended that these handling charges should be added to the invoice price for computing duty. The authorities upheld this position, and the Tribunal confirmed the decision.

Application of valuation rules under Section 4 of the Act:
The appellant argued that the handling charges should not be included in the assessable value for duty computation. The dispute centered around whether the handling charges were part of the assessable value. The appellant relied on Rule 6(b)(i) of the Valuation Rules and the statutory price of aluminum to support their position.

Statutory provisions for limitation period under Rule 9 and Rule 10:
The appellant also raised a contention regarding the limitation period for issuing the notice. The Tribunal applied the five-year limitation period based on suppression of information by the appellant. The appellant argued that the notice was issued beyond the prescribed period, but the Tribunal upheld the longer limitation period.

Determination of pre-manufacturing costs and their inclusion in assessable value:
The handling charges collected were deemed to represent pre-manufacturing costs incurred by the appellant in lifting the ingots. The Tribunal concluded that these charges should be considered as part of the value for duty computation, as they were necessary expenses related to the manufacturing process.

Justification for the longer limitation period based on suppression of information:
The Tribunal and departmental authorities found that the appellant had suppressed information regarding the handling charges, leading to the application of the longer limitation period. The Supreme Court agreed with this assessment, stating that there was no justification for a different view based on the facts presented.

Retrospective application of the five-year limitation rule:
The appellant challenged the retrospective application of the five-year limitation rule. The Court clarified that once the rule is in effect, it covers a period of up to five years preceding the date of the notice. The Court upheld the Tribunal's decision on the retrospective application of the limitation rule, dismissing the appellant's plea on this issue.

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