1976 (4) TMI 207 - Commissioner - Central Excise

Issues:
1. Denial of personal hearing before the Assistant Collector.
2. Time-barred demands.
3. Nature of business transactions between the appellants and M/s. Recold Appliances Pvt. Ltd.
4. Assessment of value of articles.
5. Applicability of judgments from Allahabad High Court and Kerala High Court.
6. Violation of principles of natural justice.
7. Disputed net wholesale prices of M/s. Recold Appliances.
8. Date of demand under Rule 10 of the Central Excise Rules.

Analysis:

1. The appellants argued that they were denied a personal hearing before the Assistant Collector, which they requested in their supplementary reply. The Appellate Collector found that the Assistant Collector had already decided the case before receiving the request for a personal hearing, and no violation of natural justice was observed.

2. The appellants contended that the demands made were time-barred as they were issued after a year from the date of the Adjudication Order. The Appellate Collector clarified that demands made within one year from the date of payment or adjustment of duty were valid, while demands beyond one year were set aside as time-barred.

3. The nature of business transactions between the appellants and M/s. Recold Appliances Pvt. Ltd. was scrutinized. The Appellate Collector determined that the appellants manufactured goods bearing the brand name of M/s. Recold Appliances as per an agreement, and these goods were exclusively sold to M/s. Recold Appliances. Hence, the assessable value for duty calculation should be based on prices in open market conditions.

4. The assessment of the value of articles was challenged by the appellants, who argued that the prices at the time of clearance were different from those in the Adjudication Order. The Appellate Collector upheld that duty should be calculated based on the prices at which M/s. Recold Appliances sold the goods in open market conditions.

5. The appellants relied on judgments from Allahabad High Court and Kerala High Court to support their case. The Appellate Collector differentiated the facts of those cases from the present situation and emphasized that each case must be decided on its own merits.

6. The plea of violation of principles of natural justice was raised by the appellants. The Appellate Collector found no evidence of such violation at the lower level based on the available records.

7. Disputed net wholesale prices of M/s. Recold Appliances were brought up during the appeal stage. The Appellate Collector noted that this new fact was not disputed before the Assistant Collector and could not be considered at the appeal stage.

8. The date of demand under Rule 10 of the Central Excise Rules was discussed. The Appellate Collector clarified that the demand is deemed to be issued when a show cause notice is served, not when the Adjudication Order is issued. Demands beyond one year from the date of payment or adjustment of duty were deemed time-barred under Rule 10.

In conclusion, the Appellate Collector upheld the Assistant Collector's orders, rejecting most of the appellants' pleas except for the time-bar issue. Demands beyond one year were set aside, while demands within one year were upheld. The Assistant Collector was directed to reevaluate and raise fresh demands accordingly.

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