2002 (1) TMI 138 - AT - Central Excise

Summary

Issues:
1. Time-barring of demand confirmed by Commissioner.
2. Invocation of extended period of limitation.
3. Inclusion of post-manufacturing expenses in assessable value.
4. Calculation of profit margin for assessable value.
5. Suppression of facts by the appellant.
6. Applicability of valuation principles as per the Bombay Tyre International case.

Issue 1: The appellant argued that the demand confirmed by the Commissioner was time-barred as they had filed the price list and cleared goods only under the approved price list. They contended that no deliberate suppression of facts occurred to evade duty payment. Citing a Supreme Court judgment, they emphasized that the burden was on the Department to prove such conditions for invoking the extended period of limitation.

Issue 2: The Department maintained that the appellant's filing of incorrect information in the price lists constituted suppression of facts, justifying the invocation of the extended period. They argued against the necessity of using a notional profit margin for determining the assessable value, supporting the Commissioner's decision to invoke the extended period.

Issue 3: The appellant contended that post-manufacturing expenses like travelling expenses, royalty charges, and interest/finance charges should not be included in the assessable value. They argued that the Commissioner erred in including these expenses, as Supreme Court rulings established that such expenses were not to be considered.

Issue 4: The appellant claimed that they uniformly adopted a 10% profit margin as required under Valuation Rules, while the Department suggested a lower profit margin. They argued that the Commissioner's decision to calculate assessable value based on a different profit margin was contrary to law.

Issue 5: The Department asserted that the appellant's failure to include various costs in the price lists constituted suppression of facts. They highlighted that the appellant did not provide all necessary data, leading to the approval of lower values than required. The Department supported the Commissioner's decision to invoke the extended period based on this suppression of facts.

Issue 6: The Tribunal referenced the Bombay Tyre International case, emphasizing that the assessable value for excise duty should include all costs incurred by the manufacturer up to the point of sale, subject to certain abatements. They concluded that the appellant's plea lacked merit, as they had not disclosed all cost components in the approved price list, as required by law. The Tribunal upheld the Commissioner's decision, rejecting the appellant's appeal based on the principles established in the Bombay Tyre International case.