1981 (12) TMI 38 - HC - Central Excise

Revision - Short Levy - Demand Notice including partly time barred demand - Legality - Classification List

Issues Involved:
1. Revision of the approved price list retrospectively and without a hearing.
2. Inclusion of post-manufacturing charges in the assessable value.
3. Timeliness of the Central Government's revision notice.
4. Scope of new grounds taken by the Assistant Collector on remand.
5. Demand beyond the scope of Section 4 of the Act due to post-manufacturing charges.

Detailed Analysis:

1. Revision of the Approved Price List Retrospectively and Without a Hearing:
The petitioners argued that the revision of the approved price list was illegal as it was revised retrospectively and without a hearing. The court noted that the grievance regarding the lack of hearing was addressed when the matter was remanded by the Appellate Collector on 29th May, 1976, and the petitioners were subsequently heard. Regarding the retrospective revision, Rule 10 of the Central Excise Rules, 1944, allowed the excise authorities to issue a notice within three months from the date on which the duty was paid. The Assistant Collector excluded the demand for the period prior to three months from the date of the notice and held the petitioners liable only for the period 10th December, 1975 to 10th March, 1976. Thus, the grievance did not survive.

2. Inclusion of Post-Manufacturing Charges in the Assessable Value:
The Assistant Collector included post-manufacturing charges in the assessable value, which was contested by the petitioners. The Appellate Collector found that these charges were optional and should not be included in the assessable value. However, the Central Government in revision held that the Appellate Collector had erred, and these charges should be considered in determining the value of the goods. The court upheld the Central Government's order, noting that there was no material provided by the petitioners to demonstrate that these post-manufacturing expenses were actually incurred.

3. Timeliness of the Central Government's Revision Notice:
The petitioners contended that the revision by the Central Government was not computed in time. The court referred to Section 36(2) of the Act, which allowed the Central Government to call for records within one year from the date of the order. The court found that the revision notice issued on 6th September, 1978, was within the one-year period from the date of the appellate order (15th September, 1977), thus making the revision timely.

4. Scope of New Grounds Taken by the Assistant Collector on Remand:
The petitioners argued that no new grounds could be taken by the Assistant Collector on remand. The court noted that the proceedings before the Assistant Collector were de novo, and it was open to him to consider new points after giving notice to the petitioners. The Assistant Collector had given reasonable opportunity to the petitioners to explain their stand on the new points, making his actions valid.

5. Demand Beyond the Scope of Section 4 of the Act Due to Post-Manufacturing Charges:
The petitioners contended that the demand was beyond the scope of Section 4 of the Act because post-manufacturing charges were added to the assessable value. The court found that there was no material before the Assistant Collector to judge whether these charges were actually incurred. The petitioners failed to provide evidence despite being invited to do so. Consequently, the Central Government's order in revision, which set aside the Appellate Collector's order and restored the Assistant Collector's order, was upheld.

Conclusion:
The court dismissed the petition with costs, finding no merit in the contentions raised by the petitioners. The rule was discharged, and leave to appeal to the Supreme Court was refused.

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