1985 (5) TMI 184 - AT - Central Excise

Summary

Issues:
- Legality and correctness of the order passed by the Collector of Central Excise (Appeals) Calcutta
- Availing benefit of exemption under Notification 83/83 in respect of straw board
- Charging higher value from customers than approved value
- Demand raised against the respondents in respect of excise duty
- Interpretation of Section 4 of the Central Excises and Salt Act, 1944
- Application of the Explanation to Section 4(4)(d)
- Plea of limitation for raising demand against the respondents

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi questions the legality and correctness of the order dated 28-6-1984 passed by the Collector of Central Excise (Appeals) Calcutta. The respondents were availing the benefit of exemption under Notification 83/83 for straw board but had collected excise duty from customers without including it in the value for determining liability to central excise duty. The Collector (Appeals) allowed the appeal, leading to the Revenue filing an appeal to the Tribunal. The respondents had charged higher value from customers than the approved value, resulting in a demand raised against them for excise duty. The Assistant Collector of Central Excise confirmed a portion of the demand against the respondents.

During the hearing, the Advocate for the respondents argued that the valuation of excisable goods should be determined according to Section 4 of the Central Excises and Salt Act, 1944. The Advocate contended that duty was specific and ad valorem, and therefore, the value had to be determined in accordance with Section 4. However, the Tribunal found no merit in this argument and referred to the Explanation to Section 4(4)(d) inserted retrospectively by the Finance Bill, 1982. The Explanation clarified the calculation of excise duty payable on excisable goods, supporting the Tribunal's decision.

Regarding the plea of limitation for raising demand against the respondents, the Tribunal noted that the duty element was collected from customers despite not being included in the price list. This discrepancy was discovered during scrutiny by the Revenue. The Tribunal rejected the argument that a shorter period of limitation should apply and upheld the demand raised against the respondents. The impugned order was found to be in contravention of the Explanation to Section 4(4)(d) and was set aside by the Tribunal. Consequently, the appeal was allowed, and the order passed by the Assistant Collector of Central Excise was restored.