2023 (11) TMI 610 - AT - Central Excise

Seeking approval of price list by including the JPC Cess in the assessable value - belated SCN - HELD THAT - It is seen that the Price List was provisionally assessed on 10/3/1992 and was Finally Approved on 11/12/1992. The Assistant Commissioner has passed an Order allowing deduction of JPC from the assessable value. The Appellant has followed this Order for their clearance during March 1992 to May 1993. In the absence of any Stay or adverse Order against this OIO during the period March 1992 to May 1993, it has to be concluded that the Appellant has followed the finalized price list which was available with them during that period. This being so, the Commissioner (Appeals) has set aside the OIO dated 11/12/1992 vide his OIA dated 19/04/1994. On going through this OIA, it is seen that he has given direction to the Assistant Commissioner to approve the price list after adding the JPC Cess. The Department has not brought out any evidence that this was done by the Assistant Commissioner by passing a suitable order to this effect. The Show Cause Notice dated 22.02.1996 was issued in belated manner after about 3 years 8 months from the date of initial finalization done by AC on 11/12/1992. If it is taken that the Department had challenged this OIO and the price list approved by the Assistant Commissioner was finalized only after the OIA was passed on 19/04/1994, even from this date of OIA i.e. 19/04/1994, there is delay of more than 22 months in issuing the Show Cause Notice. After going through the relevant paragraph of the judgment of the Hon ble Supreme Court, in the case of MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA 1996 (12) TMI 50 - SUPREME COURT , it is seen that the Apex Court has made it clear that what is applicable to the assesse is made equally applicable to the Revenue also. Therefore, the Revenue cannot take the pleading that the provisions of Section 11A are not applicable to them in case of finalization of provisionally assessed RT-12 Returns. There are force in the Appellant s arguments that the Show Cause Notice issued on 22/02/1996 has to be assumed as premature if the RT-12 assessment date is taken as the date of final assessment - the impugned OIA is legally not sustainable - appeal allowed.

Summary

Issues involved:
The issues involved in this legal judgment include the finalization of a price list provisionally assessed by the Appellant, the inclusion of JPC Cess in the assessable value, the timeliness of the Show Cause Notice issued by the Department, and the demand for interest under Rule 7 of the Central Excise Rules, 2002.

Finalization of Price List and Inclusion of JPC Cess:
The Appellant, a manufacturer of steel items, had their price list provisionally assessed and finalized by the Assistant Commissioner on 11/12/1992, allowing deduction of JPC Cess. The Department challenged this decision, leading to a series of appeals and orders. The Commissioner (Appeals) directed the inclusion of JPC Cess in the assessable value. However, the Show Cause Notice proposing a demand for differential duty was issued belatedly on 22/02/1996, after a considerable delay from the finalization of the price list. The Tribunal held that the Show Cause Notice was untimely and set aside the demand, emphasizing the need for adherence to statutory timelines.

Timeliness of Show Cause Notice and Interest Demand:
The Department issued a Show Cause Notice on 22/02/1996, proposing a demand for differential duty without invoking the extended period provisions. The Appellant argued that the Notice was time-barred, as it was issued long after the finalization of the price list. Additionally, the Commissioner (Appeals) demanded interest under Rule 7 of CER, 2002, beyond the scope of the original Show Cause Notice. The Tribunal agreed with the Appellant, highlighting the importance of adhering to statutory timelines and the scope of the original notice in demanding interest.

Judgment and Conclusion:
The Tribunal found in favor of the Appellant, ruling that the Show Cause Notice was issued in a belated manner, violating statutory timelines. The Tribunal emphasized that the provisions applicable to the assessee must equally apply to the Revenue, rejecting the argument that Section 11A did not apply to the Department in finalizing provisionally assessed returns. Ultimately, the impugned order was deemed legally unsustainable, and the Appeal was allowed, granting the Appellant eligibility for consequential relief as per the law.