2004 (11) TMI 142 - AT - Central Excise

Summary

Issues:
- Revision of assessable value of glass bottles
- Demand for differential duty and penalty
- Suppression of facts leading to extended period under Section 11A of the Central Excise Act
- Contention of limitation as the sole ground for appeal

Analysis:

The judgment by the Appellate Tribunal CESTAT, New Delhi, involved a case where the Commissioner revised the assessable value of glass bottles manufactured by the appellants, leading to a demand for differential duty amounting to over Rs. 90 lakhs and a penalty of Rs. 10 lakhs for the period between February 1988 to November 1991. The main contention raised by the appellant was that the Commissioner erred in finding suppression of facts, justifying the extended period under the proviso to Section 11A of the Central Excise Act. The appeal was solely based on the ground of limitation.

Upon perusing the records and submissions, the Tribunal noted the Commissioner's finding on suppression of facts, particularly related to the calculation of the cost of production of glass bottles. The appellant argued that they had calculated the cost of production based on direct costs in their factory and had filed approved price lists with the Central Excise authorities. The appellant contended that the certificate filed clearly indicated that only "factory cost" and direct expenses were considered, excluding financial and management costs. The Tribunal observed that the certificate provided by the appellants during the relevant period explicitly stated the basis of costing and the related period, indicating no suppression of material particulars.

The Tribunal further emphasized that if the costing method used was deemed unreliable, it was the Revenue's responsibility to raise objections within the normal period under Section 11A. As the ingredients necessary for invoking the extended period were absent, the Tribunal held that there was no suppression of facts warranting the extended period. Citing precedents, the Tribunal concluded that the appeal succeeded on the ground of limitation, setting aside the impugned order and allowing the appeal.