1985 (6) TMI 181 - AT - Central Excise

Summary

Issues Involved:
1. Inclusion of handling charges in the assessable value.
2. Applicability of the Aluminium Control Order.
3. Applicability of Notification No. 265/76-CE.
4. Validity of the demand based on the period of limitation.
5. Allegation of suppression of facts and clandestine removal.

Detailed Analysis:

1. Inclusion of Handling Charges in the Assessable Value:
The appellants argued that handling charges for the materials incurred on behalf of customers should not be included in the assessable value as they are not related to manufacturing costs. The Tribunal rejected this argument, stating that transportation charges for raw materials are pre-manufacturing costs incurred to bring the raw materials to the factory and must be included in the assessable value.

2. Applicability of the Aluminium Control Order:
The appellants contended that their unit should be covered under the Aluminium Control Order. However, the Tribunal noted that no evidence was provided to show that the appellants' unit was registered for the purposes of the Aluminium Control Order. Consequently, it was held that the appellants are not covered by this Order.

3. Applicability of Notification No. 265/76-CE:
The appellants claimed the benefit of Notification No. 265/76-CE, which grants partial exemption to aluminium wire rods manufactured from levy aluminium. The Tribunal found that the appellants did not claim this benefit in the price list filed at the relevant time and failed to show that they met the conditions of the notification. Therefore, this claim was not accepted.

4. Validity of the Demand Based on the Period of Limitation:
The appellants argued that the demand for the period from 27-9-74 to 5-8-76 was barred by limitation as Rule 10 was amended on 6-8-77. The Tribunal referred to the judgment in Atma Steel Pvt. Ltd. and others v. Collector of Central Excise, Chandigarh, which held that the period of limitation for issuing a show cause notice would be the one permissible under the existing provisions at the time of issue. Therefore, the demand was found to be valid for five years prior to the date of the show cause notice.

5. Allegation of Suppression of Facts and Clandestine Removal:
The appellants argued that there was no clandestine removal of goods and that the omission of debit notes in the price list was bona fide. The Tribunal noted that 916 debit notes were issued over nearly three years and concluded that the omission was not bona fide. The Tribunal also referred to the show cause notice which made clear allegations of suppression of information and, therefore, held that the extended period of limitation was applicable.

Conclusion:
The Tribunal dismissed the appeal, holding that the appellants must pay duty on the additional amounts collected from customers by debit notes. These amounts were part of the assessable value and were liable to be included for the assessment of excise duty. The demand was found to be valid for a period of five years prior to the date of the show cause notice.