1996 (7) TMI 600 - AT - Central Excise

Summary

Issues:
1. Assessment of excess duty charged by the company on goods sold through a sale depot.
2. Scrutiny of statistical data by the Assistant Collector to re-quantify duty payable.
3. Limitation of duty liability to goods removed within a specific period.
4. Imposition of a penalty under Rule 173Q(1) of Central Excise Rules.
5. Time-barred show cause notice due to alleged suppression of facts by the appellant.

Analysis:

Issue 1:
The judgment addresses the assessment of excess duty charged by the company on goods sold through a sale depot. It states that the duty charged in excess of the amount actually paid by the company at the time of goods removal will form part of the assessable value, making the company liable to pay differential duty at the appropriate rate.

Issue 2:
The Assistant Collector, Central Excise, Ranchi is directed to scrutinize the correctness of the statistical data provided by the assessee during the personal hearing. If necessary, the duty payable by the company will be re-quantified based on relevant documents supplied by the assessee within a month of receiving the order.

Issue 3:
The duty liability of the company is limited to the goods removed from the factory within a specific period of five years counting backward from the date of the show cause notice.

Issue 4:
A penalty of Rs. 5,000 is imposed on the company under Rule 173Q(1) of the Central Excise Rules.

Issue 5:
The main contention revolves around whether the show cause notice is time-barred due to alleged suppression of facts by the appellant. The appellant argues that the Department had knowledge of the excess duty charged based on correspondences and bill submissions over the years, thus claiming the notice is barred by time. On the other hand, the respondent asserts that the suppression of the fact of charging higher duty from customers was intentional and justifies the longer period of limitation of five years from the date of clearance of goods. The judgment upholds the show cause notice as not time-barred, emphasizing that the Department can demand duty within five years from the date of clearance if there was suppression of facts at the time of clearance, regardless of when the Department gained knowledge of the suppressed fact. The Adjudicating Authority is directed to requantify the demand within the specified period, and the appellant is allowed to claim permissible deductions under Section 4 of the Act during this process.