1985 (9) TMI 210 - Commissioner - Central Excise

Summary

Issues:
Time-barred demand due to delay in issuing show cause notice, applicability of Notification No. 120/75 for invoice assessment, inclusion of free-supplied inserts in assessable value.

Analysis:
The appeal was filed against an order confirming a demand of Rs. 2,76,033.60 by the Assistant Collector of Central Excise. The appellants, manufacturers of monoblock prestressed concrete sleepers, opted for invoice assessment under Notification No. 120/75-CE. The demand was based on the value of four cost malleable cast iron inserts supplied free of cost by the Railway Authorities. The Superintendent issued a show cause notice beyond six months, alleging duty payment on the inserts fixed in sleepers cleared to the Railways. The appellants argued that the demand was time-barred, as no facts were suppressed, and the contracts were known to department officers. They contended that invoice price was the sole consideration for assessment under the notification.

The Collector found merit in the appellant's argument that the demand was time-barred, as the department failed to substantiate any suppression of facts. The lower authority did not establish any contravention of Notification No. 120/75. The appellants were entitled to avail themselves of assessment at the invoice price, as the contract was not influenced by any other relationship. Additionally, the free-supplied inserts could not be included in the assessable value. The Collector referenced judgments from the High Court of Andhra Pradesh and the Collector of Central Excise (Appeals), Calcutta, supporting the appellant's position.

Consequently, the appeal succeeded on both time-barred grounds and merits. The order of the Assistant Collector was set aside, and directions were given for granting consequential relief to the appellants.