2011 (5) TMI 743 - AT - Central Excise

Duty along with interest and penalty - recovery of extra/additional amount of Rs. 2/- per kg on the clearance of Tex yarn - As per the Revenue, the said amount of Rs. 2/- per kg shown in the invoices under the column others , is required to be added in the assessable value of Tex yarn cleared by them - respondents have not claimed any separate deduction on account of transportation and octroi Held that - Revenue in their appeal memo, has nowhere contended that the such transportation charges were never incurred by the respondent and such octroi charges were never paid by them. The onus to rebut the appellant s plea that such expense on clearance, freight and octroi was on the Revenue, demand relates to the period 18-1-96 to 1997, whereas the Show Cause Notice was issued in the year 2001. Admittedly, the recovery of Rs. 2/- per kg of yarn was being reflected in their Central Excise invoices. As such, it cannot be said that there was any suppression or mala fide on the part of the respondent so as to evade payment of duty, in which case, the extended period would not be available to the Revenue, demand having been raised after normal period of limitation, is also barred by limitation, appeal filed by the Revenue rejected

Summary

Issues:
Recovery of extra amount on Tex yarn clearance, assessable value determination, transportation and octroi charges as post-manufacturing expenses, limitation period for demand.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Ahmedabad concerned the dispute over the recovery of an additional amount of Rs. 2 per kg on the clearance of Tex yarn, as indicated in the Central Excise invoices issued by the respondent. The Revenue contended that this amount should be added to the assessable value of the yarn. Conversely, the respondent argued that the Rs. 2 per kg recovery from customers represented post-manufacturing expenses like transportation and octroi charges, which should not be included in the assessable value of the final product. The Commissioner (Appeals) accepted the respondent's plea, prompting the Revenue to appeal (para 2).

Upon reviewing the Commissioner (Appeals) order, the Tribunal observed that the respondent did not claim any separate deduction for transportation and octroi charges. The appellate authority acknowledged these expenses as permissible deductions, considering the location of the respondent's factory and the necessity of incurring transportation costs to deliver goods to customers in Surat. The Tribunal noted that the Revenue did not dispute the transportation and octroi charges incurred by the respondent. As the Revenue failed to provide evidence to counter the respondent's claims, the Tribunal upheld the Commissioner (Appeals) decision (para 3).

Additionally, the Tribunal highlighted that the demand in question pertained to the period from 18-1-96 to 1997, while the Show Cause Notice was issued in 2001. Since the recovery of Rs. 2 per kg was transparently reflected in the Central Excise invoices, there was no evidence of suppression or mala fide intent by the respondent to evade duty payment. Consequently, the Tribunal ruled that the demand raised beyond the normal limitation period was time-barred and could not be sustained (para 4).

In conclusion, the Appellate Tribunal CESTAT, Ahmedabad rejected the Revenue's appeal, affirming the Commissioner (Appeals) decision in favor of the respondent. The judgment emphasized the importance of considering post-manufacturing expenses, the limitations on the Revenue's ability to raise demands, and the necessity for evidence to support allegations in such cases (para 5).