2016 (9) TMI 882 - AT - Central Excise

Valuation - includability of amount collected towards collection charges in the assessable value - duty paid under protest as the same was done without issuance of any Show Cause Notice - Held that - the addition of collection charges, weighment difference and rate difference are very much in the nature of additional consideration and hence required to be included in the assesable value for the discharge of excise duty. Period of limitation - Demand alongwith interest and penalty - additional consideration received towards collection charges - audit of appellant was conducted in 9/2003 and audit note also is issued on 31.01.2005 - Held that - the quantifying the collection charges collected in 2003-04 and having directed JRO to verify the issue in detail and take necessary action to safeguard the revenue, department cannot then take its own sweet time to issue notice on 29.09.2007 i.e., after a lapse of more than four years of the audit. Therefore, the appellant does have a case on the issue of limitation, and that SCN and hence the demand revised in the impugned order is time barred except for the normal period of demand immediately preceding the date of service of Show Cause Notice. The penalty imposed under Rule 25 is also set aside. the demand raised beyond the normal period, is hit by limitation and unsustainable. The impugned demand for the normal period along with interest thereof is sustained and the jurisdictional, Range Superintendent is directed to re-quantify the amount of duty and interest thereof for the normal period. - Decided partly in favour of appellant

Summary

Issues:
- Includability of collection charges in the assessable value for excise duty payment
- Barred by limitation - time period for issuing demand notice
- Confirmation of proposals in Show Cause Notice
- Appeal against Order-in-Original and Order-in-Appeal

Includability of Collection Charges:
The case involved a dispute regarding the includability of collection charges in the assessable value for the purpose of excise duty payment. The audit report raised questions about the amount collected towards collection charges. The department demanded duty based on additional consideration received towards collection charges. The tribunal held that collection charges, weighment difference, and rate difference are akin to additional consideration and should be included in the assessable value for excise duty discharge.

Barred by Limitation - Time Period for Issuing Demand Notice:
The appellant argued that the demand raised by the department was barred by limitation as the audit note was issued in 2005, but the demand notice was served in 2007, exceeding the normal period for issuing a notice. The tribunal agreed with the appellant, stating that the demand beyond the normal period was time-barred, except for the normal period immediately preceding the date of the Show Cause Notice. Consequently, the penalty imposed under Rule 25 was set aside.

Confirmation of Proposals in Show Cause Notice:
The department had issued a Show Cause Notice demanding a differential duty based on additional consideration received by the appellants. The Order-in-Original confirmed the proposals in the Show Cause Notice. The tribunal analyzed the demands proposed in the Show Cause Notice and upheld the demands related to the normal period preceding the notice date while setting aside the demands beyond the normal period.

Appeal Against Order-in-Original and Order-in-Appeal:
The appellant had filed an appeal against the Order-in-Original, which was confirmed by the Order-in-Appeal. The tribunal partially allowed the appeal, holding the demand raised beyond the normal period as unsustainable due to limitation. The impugned demand for the normal period, along with interest, was sustained, and the jurisdictional Range Superintendent was directed to re-quantify the duty and interest for the normal period.

In conclusion, the tribunal partially allowed the appeal, providing consequential reliefs, and held that the demand raised beyond the normal period was hit by limitation and unsustainable. The decision emphasized the importance of timely issuance of demand notices within the statutory limitations.