1989 (1) TMI 263 - AT - Central Excise

Summary

Issues:
- Whether the demand is barred by limitation under Rule 10 of the Central Excise Rules, 1944.

Detailed Analysis:
1. The case involved a revision application filed by the appellants before the Government of India, treated as an appeal before the Tribunal, against the order of the Appellate Collector of Central Excise, Madras. The appellants, manufacturing electric horns for motor vehicles, claimed the benefit of Notification No. 71/78. However, discrepancies were found in the clearance values and duty collections reflected in invoices and gate passes.

2. The lower authorities determined that the appellants exceeded the exempted limit of Rs. 5 lakh due to the duty element collected, demanding Rs. 21,222.10 under Rule 10. A show cause notice was issued for duty payment during 1978-79.

3. The appellants argued that duty payable should not be included in the value for assessment under Section 4(4)(d). They contended that the show cause notice was time-barred, lacking allegations of suppression or misstatement.

4. The Department contended that the appellants failed to disclose the duty collection in the required declaration, implying suppression. They argued that the show cause notice sufficiently highlighted the suppression, justifying the extended time limit under Rule 10 proviso.

5. The Tribunal deliberated on the term "suppression of facts" under Rule 10, emphasizing deliberate withholding or concealment. The appellants' position was based on the understanding that duty need not be included in assessable value, supported by past interpretations and subsequent clarifications.

6. The Tribunal noted that the show cause notice did not explicitly allege suppression of facts or provide circumstances supporting such a claim. Without evidence of deliberate concealment, the demand raised beyond six months was deemed legally unsustainable, leading to the appeal's allowance.

7. The decision highlighted the necessity of specific allegations or circumstances indicating suppression for invoking the extended time limit under Rule 10. In the absence of such details in the show cause notice, the demand was set aside as not maintainable in law.

8. Ultimately, the appeal was allowed, providing the appellants with consequential relief, as the demand was found to be beyond the permissible time limit due to the lack of evidence supporting suppression of facts in the case.