1987 (3) TMI 115 - HC - Central Excise

Summary

Issues Involved:

1. Determination of assessable value for excise duty.
2. Finality of assessment orders and reopening of assessments.
3. Applicability of Rule 10 and Rule 10-A of the Central Excise Rules, 1944.

Summary:

1. Determination of Assessable Value for Excise Duty:

The appellant company challenged the demand for additional excise duty on Fiat cars sold between September 21, 1969, and April 30, 1971. The company initially sold cars at Rs. 13,434/- per car as per the Price Control Order but included an endorsement in invoices stating that the price was provisional, subject to the Supreme Court's decision. The Supreme Court later allowed the company to recover an additional price, making the effective wholesale cash price Rs. 14,862/-. The court held that the wholesale cash price was Rs. 14,862/- per car, not Rs. 13,434/-, as the price was contingent on the Supreme Court's decision.

2. Finality of Assessment Orders and Reopening of Assessments:

The appellants contended that the assessments were final and could not be reopened except within the time limit prescribed u/s 10 of the Central Excise Rules, 1944. The court found that although the assessments were final, the company's right to recover additional amounts, as clarified in the invoices, justified the demand for additional duty. The final assessments did not prevent the department from claiming higher duty due to the subsequent Supreme Court decision.

3. Applicability of Rule 10 and Rule 10-A of the Central Excise Rules, 1944:

The appellants argued that the demand for additional duty was barred by limitation u/s 10, which prescribes a one-year period for recovery of short-levied duty. The court held that Rule 10-A, which deals with residuary powers for recovery of sums due to the government and does not prescribe a limitation period, was applicable. The short levy was not due to inadvertence, error, collusion, or misconstruction but due to a subsequent change in circumstances (Supreme Court decision). Therefore, Rule 10-A was correctly invoked by the department to demand additional duty.

Conclusion:

The court dismissed the appeal, upholding the demand for additional excise duty based on the revised wholesale cash price of Rs. 14,862/- per car and the applicability of Rule 10-A for recovery of the short-levied duty. The finality of the initial assessments did not preclude the department from claiming the additional duty.