1986 (3) TMI 226 - Commissioner - Central Excise

Valuation - Sales tax deductible for determination of assessable value based on invoice price

Summary

Issues:
1. Review of order in original No. 47MP/83 dated 12-5-1983 under Section 35E(4) of the Central Excises and Salt Act, 1944.
2. Eligibility for exemption under Notification No. 105/80 Central Excise.
3. Consideration of cost of raw material for job charges in computing the value of clearances.
4. Application of Section 11 A regarding suppression of facts and limitation period.
5. Admissibility of new grounds beyond the scope of the Show Cause Notice.
6. Time-barred appeal under Section 35E(3) of the Central Excises and Salt Act, 1944.

Analysis:

1. The appeal filed by the Assistant Collector sought a review of the order vacating a show cause notice demanding duty from M/s Perfect Engineering Works. The Collector authorized the appeal under Section 35E(2) of the Act. The appellant argued errors in vacating the notice based on exemption eligibility and computation of clearances value, citing Board's letter for valuation. The respondents contended that the Show Cause Notice did not mention the inclusion of raw material costs, thus violating natural justice.

2. The Assistant Collector correctly vacated the Show Cause Notice, considering the deductibility of sales tax from the assessable value. The value of raw material for job work is to be added for exemption eligibility, but since not charged in the notice, it was beyond the scope. The appeal was also time-barred under Section 35E(3) due to the one-year limitation period amendment, as the review was initiated after the lapse of one year.

3. The decision upheld the Assistant Collector's order-in-original No. 47/MP/83 dated 12th May, 1983, rejecting the appeal in form EA 2. The judgment emphasized adherence to legal provisions, including exemption criteria, valuation considerations, and limitation periods, in line with relevant legal precedents and principles of natural justice.

This detailed analysis covers the legal issues raised in the judgment, addressing the arguments presented by both parties and the legal reasoning behind the decision.