1994 (5) TMI 265 - AT - Central Excise

Issues Involved:
1. Limitation under Section 35E(3) of the Central Excises & Salt Act.
2. Applicability of Section 11A to Section 35E(3).
3. Provisional assessment and finalization.
4. Deductions allowed by the Assistant Collector.
5. Appeal against the Assistant Collector's order.
6. Relevant date for limitation purposes.

Issue-wise Detailed Analysis:

1. Limitation under Section 35E(3) of the Central Excises & Salt Act:
The main question before the Larger Bench was whether the limitation prescribed under Section 35E(3) should be in accordance with Section 11A. The Tribunal concluded that the limitation under Section 35E(3) is independent of Section 11A. Section 35E(3) explicitly mentions a one-year period for the Collector to review an order, and this period is distinct from the six-month limitation under Section 11A for issuing show cause notices for short levy or erroneous refund.

2. Applicability of Section 11A to Section 35E(3):
The Tribunal held that Section 11A, which deals with the recovery of duties not levied, short-levied, or erroneously refunded, does not apply to Section 35E(3). Section 35E(3) is concerned with the review of orders by the Collector, and its limitation period is one year from the date of the adjudication order. The Tribunal emphasized that the two sections serve different purposes and operate in different areas, thus they should not be conflated.

3. Provisional Assessment and Finalization:
The case involved the finalization of provisional assessments. The appellants, M/s. Asian Paints (India) Ltd., had their price lists assessed provisionally, and after several rounds of litigation, the Assistant Collector finalized the assessments. The Tribunal noted that the provisional assessment remains alive until the dispute is finally settled, and the duty paid under protest does not constitute final adjustment.

4. Deductions Allowed by the Assistant Collector:
The Assistant Collector allowed certain deductions (additional trade discount, regular payment performance discount, product discount, octroi, and transit insurance) in his order dated 15.10.1984. The appellants challenged the rejection of other deductions (cash discount not passed on to customers, dealers bonus, and agency commission). The Collector of Central Excise directed an appeal against the allowed deductions, which became the bone of contention regarding limitation.

5. Appeal Against the Assistant Collector's Order:
The appeal filed by the Assistant Collector under the direction of the Collector of Central Excise was contested on the grounds of being time-barred. The Tribunal concluded that the appeal was filed within the one-year limitation period prescribed under Section 35E(3), and thus, it was not time-barred.

6. Relevant Date for Limitation Purposes:
The Tribunal discussed the relevant date for computing the limitation period under Section 11A. It was concluded that the relevant date in cases of provisional assessment is the date of adjustment of duty after final assessment. Since the appellants paid the duty under protest and the assessment was still under dispute, the duty was not considered finally adjusted. Therefore, the limitation under Section 11A did not apply in this context.

Conclusion:
The Tribunal held that the limitation prescribed under Section 35E(3) should not be in accordance with Section 11A. The appeal filed by the Assistant Collector was within the one-year limitation period under Section 35E(3), and the provisional assessment remained alive until the dispute was finally settled. The relevant date for limitation purposes in cases of provisional assessment is the date of final adjustment of duty, which had not occurred in this case.

← Previous Next →