1988 (9) TMI 179 - AT - Central Excise

Summary

Issues:
1. Incorrect assessment of excise duty by the appellants.
2. Applicability of retrospective amendment to Section 4 of the Finance Act.
3. Justification of extended period of limitation.
4. Allegations of suppression by the appellants.
5. Passing on of concession to customers under notification No. 128/77.
6. Compliance with price list approval and duty of Central Excise officers.

Analysis:
1. The appellants were manufacturing paper subject to central excise duty at a concessional rate. The Central Excise Officers discovered that the appellants were collecting full excise duty from customers but debiting only 50% to the Government, leading to an incorrect assessable value. The Department issued a show cause notice to revise the assessable value upwards, which the appellants resisted, claiming exemption notification protection and time-barred demand. The Assistant Collector confirmed the demand, upheld by the Collector (Appeals), emphasizing the correct assessable value calculation under Section 4 of the Act.

2. The appellants argued against the retrospective amendment to Section 4 of the Finance Act, citing precedents. However, the Tribunal rejected this argument, stating that the law in force at the time of the show cause notice governs. The retrospective amendment was applicable, justifying the demand based on newly discovered facts not declared in the price list, allowing for a retrospective demand.

3. The issue of the extended period of limitation under Section 11A was raised. The Tribunal upheld the Collector (Appeals)'s decision to apply the extended limitation period due to clear allegations of suppression in the show cause notices. The appellants' failure to disclose the full excise duty collected from buyers constituted suppression, justifying the extended limitation period.

4. The appellants contended that the demands were unjustified as there was no condition in notification No. 128/77 to pass on concessions to customers. However, the Tribunal held that the extra amount collected was not excise duty but an element of value, supporting the lower authorities' orders.

5. Allegations of suppression were further examined, with the Tribunal dismissing the appellants' arguments regarding Central Excise officers' duty to check price lists with invoices. The failure to disclose the total sale value to the Department constituted suppression, justifying the extended limitation period and correct assessment of excise duty.

6. The Tribunal dismissed all other arguments raised by the appellants, upholding the findings of the lower authorities and ultimately dismissing both appeals. Compliance with price list approval and Central Excise officers' duties were deemed necessary, and the appellants' arguments were found lacking in legal and factual merit.