2002 (8) TMI 163 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case include the confirmation of duty demand u/s 11A(2) of the Central Excise Act, 1944, imposition of redemption fine and penalty, and the question of whether interest received on booking deposits should be added to the assessable value.

Summary of Judgment:

1. Confirmation of Duty Demand:
The appellant, a manufacturer of cars, challenged the duty demand confirmed by the Commissioner of Central Excise. The period in question was from 1-4-1989 to 31-3-1990, with a duty demand of Rs. 10,84,88,450/-, a redemption fine of Rs. 10,00,000/-, and a penalty of Rs. 50,00,000/- imposed. The issue revolved around the invocation of a larger period of limitation by the Revenue.

2. Interest on Booking Deposits:
The main issue was whether interest received on booking deposits should be added to the assessable value of the cars sold. The appellant argued that the interest did not suppress the value of the cars, citing relevant legal precedents. The Revenue contended that the interest had a direct nexus to the price of the cars, as indicated in a Press Note issued by the appellant.

3. Invocation of Larger Period of Limitation:
The appellant argued against the invocation of a larger period of limitation, stating that the issue regarding interest on deposits was raised earlier and known to the department. The Revenue justified the larger period based on when the nexus between interest on deposits and assessable value came to light.

4. Contentions and Counter-Contentions:
The appellant disputed the Revenue's claims, pointing out errors in the Press Note and highlighting that the price increase was due to other reasons, not the interest on deposits. The appellant also referenced previous Tribunal decisions supporting their stance on not including interest on deposits in the assessable value.

5. Decision on Larger Period of Limitation:
The Tribunal found that the Revenue failed to justify the invocation of a larger period of limitation. Despite detailed arguments from both sides on the demand's merits, the Tribunal did not delve into the demand's specifics due to the lack of justification for the larger period.

6. Conclusion:
The Tribunal held that there was no justification for invoking the larger period of limitation, rendering the show cause notice issued beyond the limitation period invalid. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.