1987 (12) TMI 115 - AT - Central Excise

Issues Involved:
1. Correctness of price declared in the price list under Section 4(1)(a).
2. Alleged removal of machines without payment of duty.
3. Time-barred demand and limitation under Central Excise law.
4. Inclusion of erection and installation charges in assessable value.
5. Application of extended time limit for raising the demand.

Detailed Analysis:

1. Correctness of Price Declared in the Price List under Section 4(1)(a):
The appellants filed a price list under Section 4(1)(a) of the Central Excises & Salt Act, 1944, declaring the Calcutta City price for assessment. The departmental authorities charged the appellants with declaring lower prices in the price list as they sold goods at higher prices from various depots. The appellants argued that the Calcutta City price included elements like freight, insurance, and erection charges and represented the cost of manufacture plus manufacturing profit. The Tribunal noted that the price declared should be the one at which goods are ordinarily sold. Since sales at Calcutta were limited and not all machines were sold from the Calcutta depot, the declared price could not be taken as correct for machines sold from other depots. The appellants failed to provide detailed information on the elements included in their prices, and the Tribunal held that the appellants had not declared the correct price for assessment purposes.

2. Alleged Removal of Machines without Payment of Duty:
The appellants were charged with removing machines without payment of duty. They argued that some bigger machines were removed in parts, and each removal was taken as a separate machine. The Tribunal found that the lower authority conducted a selective check of documents and did not correctly compute the removal of machines. The Tribunal directed a remand to verify the actual number of machines removed and the duty paid.

3. Time-Barred Demand and Limitation under Central Excise Law:
The appellants contended that the demand was time-barred as the show cause notice was issued after the six-month period. The Tribunal observed that the relevant date for reckoning the limitation was the date of service of the show cause notice. Since the show cause notice was served on 18-6-1981, the demand for the period 18-6-1977 to 30-9-1980 was time-barred.

4. Inclusion of Erection and Installation Charges in Assessable Value:
The department argued that erection and installation charges formed part of the assessable value as these were essential services provided compulsorily to the customers. The Tribunal noted that the appellants charged Central Excise duty on these charges in some cases but did not include them in the assessable value. The Tribunal held that such charges should be included in the assessable value if they were part of the sale price and not shown separately in the invoices.

5. Application of Extended Time Limit for Raising the Demand:
The department invoked the extended time limit of five years for raising the demand, alleging suppression of facts by the appellants. The Tribunal found that the appellants did not furnish the required information about prices and sales from different depots, indicating an intention to withhold correct information. The Tribunal held that the extended time limit of five years was available for raising the demand if the duty payable, as determined by the lower authorities, was found to be higher.

Conclusion:
The Tribunal allowed the appeal by remand, directing the lower authority to decide the matter de novo, taking into consideration the pricing pattern, assessable value, and sales to certain class of buyers on contract price. The Tribunal also directed the lower authority to verify the actual number of machines removed and the duty paid.

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