2020 (1) TMI 192 - AT - Central Excise

Time Limitation - Valuation - Biscuit Cone is cleared on payment of Excise Duty on their sale price to their customer - inclusion of packing material cost in assessable value - case of the department is that the sleeve which is packing material supplied by the customer to the appellant the cost thereof needs to be included in the Transaction Value and duty should be charged on the said value - HELD THAT - The appeal can be disposed of on limitation itself as the entire period is beyond the normal period of One year. As regard time bar we find that the appellant have been filing their declaration under Rule 173(b) 173(c) of erstwhile Central Excise Rules, 1944 - as the appellant have categorically declared to the department regarding packing material being supplied Free of Cost by their customer and the cost thereof was not being include, there are no instance of suppression of facts. The entire demand being beyond one year from the date of Show Cause Notice, hence stands time barred - appeal allowed on time bar.

Summary

Issues:
1. Inclusion of cost of packing material in transaction value for excise duty calculation.
2. Time limitation for issuing Show Cause Notice.

Issue 1: Inclusion of cost of packing material in transaction value:
The appeal challenged the Order-In-Original directing inclusion of the cost of packing material supplied by the customer in the transaction value for excise duty calculation. The appellant, engaged in the manufacture of Biscuit Cone, received free packing material from the customer, which they used to pack the product. The department contended that the cost of the packing material should be included in the transaction value for excise duty calculation. The appellant argued that they had declared the receipt of free packing material to the revenue authorities, stating it had no impact on the assessable value. The tribunal noted that the appellant's declaration clearly disclosed the receipt of free packing material and its non-inclusion in the assessable value. The tribunal found no suppression of facts by the appellant and emphasized that the revenue could have raised objections within the normal time frame based on the information provided. Citing similar cases, the tribunal set aside the demand for the extended period, ruling in favor of the appellant on the inclusion of the cost of packing material in the transaction value.

Issue 2: Time limitation for issuing Show Cause Notice:
The tribunal examined the time limitation aspect for issuing the Show Cause Notice. The appellant had filed declarations under Central Excise Rules, disclosing the receipt of free packing material from the customer. The tribunal emphasized that the appellant's disclosure to the revenue authorities precluded any allegation of suppression of facts. Notably, the tribunal highlighted that despite the availability of details, the revenue did not issue the Show Cause Notice within the normal time frame. Relying on previous judgments and the appellant's clear declaration, the tribunal held that the demand for the period beyond one year from the date of the Show Cause Notice was time-barred. Consequently, the tribunal set aside the impugned order and allowed the appeal solely on the grounds of time limitation without delving into the merits of the case.

In conclusion, the appellate tribunal ruled in favor of the appellant, setting aside the demand for the extended period and allowing the appeal based on the time bar issue. The judgment highlighted the importance of timely action by revenue authorities based on disclosures made by taxpayers and emphasized the significance of declarations in determining the assessable value for excise duty calculation.