1985 (5) TMI 232 - AT - Central Excise

Summary

Issues:
1. Time-barred demand for Central Excise Duty.
2. Inclusion of publicity and propaganda charges in the assessable value.
3. Allegations of suppression of facts or misstatement.
4. Invocation of Rule 10 instead of Rule 9 in the show cause notice.

Analysis:

The judgment by the Appellate Tribunal CEGAT New Delhi pertains to an appeal against the order of the Collector, Central Excise, New Delhi, confirming the demand of Central Excise Duty of Rs. 24,500 from the appellants. The appellants, manufacturers of tractors, had recovered an amount of Rs. 2,45,000 on account of publicity and propaganda charges from their authorized dealers, which the Assistant Collector held should not be excluded from the assessable value, leading to the duty demand. The appellants contended that the demand was time-barred, arguing there was no suppression of facts or misstatement, and the show cause notice did not allege any suppression of facts or misstatements.

The Departmental Representative argued that the failure to declare the amount of Rs. 50 per tractor as part of the price in the price-list constituted suppression of facts or a misstatement of value. However, the Tribunal noted that the authorities did not assess the veracity of the price list concerning the charges collected by the appellants. The Tribunal observed that detailed allegations are necessary when extending the normal limitation period from six months to five years, which was not done in this case. The show cause notice invoked Rule 10 instead of Rule 9, which was deemed irrelevant as there was no clandestine removal involved.

The Tribunal concluded that the Revenue failed to establish a case for extending the time limit to five years, ordering the modification of the demand to charge duty only for six months before the date of the show cause notice. As a result, the appeal was allowed on these terms, setting aside the extended time limit and limiting the duty liability to a shorter period.