2003 (3) TMI 622 - AT - Central Excise

Summary

Issues:
1. Dispensing with the condition of pre-deposit of duty amount and penalty.
2. Inclusion of notional testing charges in the assessable value of goods supplied to Railways.
3. Invocation of extended period of limitation for demand confirmation.

Analysis:

1. Dispensing with Pre-deposit: The appellant sought dispensation of the pre-deposit condition for the duty amount and penalty. The advocate argued that the demand was based on adding testing charges in the assessable value, which the Railways did not pay. The Commissioner's reliance on a non-existent contract clause was contested. The advocate emphasized that the contracted price included duty, with no additional flow-back to the appellant. The advocate also raised a time-bar defense, citing the issuance of show cause notices on other grounds based on submitted contracts. The Tribunal found merit in the appellant's case, allowing an unconditional stay without pre-deposit.

2. Notional Testing Charges: The Revenue contended that the appellant included Rs. 23.50 per sleeper as testing charges in the assessable value, despite the Railways not paying these charges. The Revenue argued that testing was integral to the sleeper's manufacture, citing a precedent. The Commissioner confirmed the demand, citing non-disclosure of facts regarding Railways' inspection. The Tribunal disagreed, noting that the appellant did not receive testing charges from the Railways, and mere collection from private parties did not justify adding charges to goods supplied to Railways. The Tribunal held that adding notional testing charges without actual incurrence was unjustified, ruling in favor of the appellant.

3. Extended Period of Limitation: The dispute involved the extended period for demand confirmation. The Revenue justified the extended period due to non-disclosure of Railways' inspection facts. The Tribunal, however, found in favor of the appellant, stating that the addition of notional testing charges lacked basis as the Railways did not pay such charges. The Tribunal concluded that the appellant had a strong case, leading to the dispensation of pre-deposit conditions and an unconditional stay granted.

In summary, the Tribunal ruled in favor of the appellant, dispensing with the pre-deposit condition, rejecting the inclusion of notional testing charges in the assessable value, and dismissing the invocation of the extended period of limitation for demand confirmation.