1997 (5) TMI 386 - AT - Central Excise

Summary

Issues:
Whether the amount collected for protective packing on request is liable to be included in the value of excisable goods 'Yeast'.
Whether the so-called protective packing constitutes normal packing of the excisable goods.
Whether the plea of limitation raised by the appellants is valid.
Whether the lower authority's findings on merits and limitation are tenable.
Whether the charge of wilful misstatement and suppression of fact holds against the appellants.

Analysis:
The appeal revolves around determining if the amount collected for protective packing on customer request should be considered part of the value of the excisable goods 'Yeast'. The appellant argued that their wholesale unit consists of 15 kgs of Yeast packed in 3 ply cartons, with additional packing in 5 ply cartons done only upon customer request for long-distance deliveries. The appellant contended that the 5 ply cartons were not essential for wholesale market sales at the factory gate, supported by the fact that 5% of sales were made without such protective packing. The Tribunal agreed with the appellant, ruling that the 5 ply cartons were not necessary for wholesale market sales at the factory gate, thus allowing the appeal.

The lower authorities had issued a show cause notice demanding duty payment and imposing a penalty, contending that the protective packing constituted normal packing of the excisable goods due to the high volume of sales in such packing. The adjudicating authority upheld the demand for duty and imposed a penalty, citing the lack of clarity in the price list regarding the nature of the protective packing. The Tribunal, however, found the appellant's declaration in the price list regarding the amount collected for protective packing to be clear and separate from the price of the excisable goods, rejecting the charge of wilful misstatement and suppression of fact.

The appellant had raised a plea of limitation, arguing that the declaration in the price list clearly stated that the amount collected for protective packing was not included in the price of the excisable goods. The Tribunal concurred, noting that the appellant had made a distinct declaration regarding the cost of protective packing, which was not integrated into the price of the goods. Consequently, the Tribunal found the charge of wilful misstatement and suppression of fact to be unfounded, supporting the appellant's position on the limitation issue.

In conclusion, the Tribunal allowed the appeal, emphasizing that the protective packing charge was separate from the price of the excisable goods, and the charge of wilful misstatement and suppression of fact was not justified. The Tribunal's decision led to the disposal of the appeal and the associated Stay Petition.