1989 (8) TMI 186 - AT - Central Excise

Summary

Issues:
- Assessable value determination under Section 4(4)(d)(ii) of Central Excises and Salt Act, 1944
- Exemption of duty on soap manufactured from indigenous rice bran oil
- Invocation of longer period of limitation under Section 11-A
- Provisional approval of price lists for assessment

Assessable Value Determination:
The case involved appeals and a cross objection arising from an order related to the assessable value of soap manufactured using rice bran oil. The issue centered around the concession of Excise duty claimed under Notification No. 25/75-C.E. The department alleged underpayment of duty based on price list scrutiny, leading to a demand for differential duty. The Asstt. Collector and the Collector (Appeals) upheld the demand, considering only the actual duty paid as deductable for assessable value determination. The consultant for the appellant argued against this view, citing Section 4(4)(d)(ii) and the nature of incentive rebate notifications. The Tribunal, after considering various decisions, upheld the Collector (Appeals)'s order, emphasizing that only actual duty paid should be excluded for assessable value calculation in case of exemptions.

Exemption of Duty on Indigenous Rice Bran Oil Soap:
The soap manufacturer sought exemption under Notification No. 25/75-C.E. for using indigenous rice bran oil in soap production. The department issued a show cause notice for underpayment of duty, leading to the demand for differential duty. The appellant contended that the concession did not require passing on the benefit to customers, which was supported by the Collector (Appeals). The Tribunal affirmed the Collector (Appeals)'s decision on the exemption issue, stating that the notification straightforwardly exempted soap varieties listed therein from a portion of Central Excise duty without the need for benefit transfer.

Invocation of Longer Period of Limitation:
Regarding the limitation period under Section 11-A, the department argued that the longer period should apply due to provisional approval of price lists. However, the Collector (Appeals) disagreed, noting that the demand was not based on finalization of price lists as per Rule 9-B. The Tribunal concurred with the Collector (Appeals), emphasizing that the demand was not a result of finalization of provisional assessment, thus rejecting the department's contention on limitation.

Provisional Approval of Price Lists for Assessment:
The issue of provisional approval of price lists for assessment was raised in the context of the limitation period. The department claimed that since the price lists were provisionally approved, the longer limitation period should apply. However, the Collector (Appeals) correctly pointed out that the demand was not linked to finalization of price lists under Rule 9-B. The Tribunal supported this view, highlighting that the demand was not a result of finalizing provisional assessment, thereby upholding the Collector (Appeals)'s decision on the limitation issue.

In conclusion, the Tribunal upheld the Collector (Appeals)'s decision on the assessable value determination and exemption of duty issues, while also supporting the Collector (Appeals)'s stance on the limitation period based on the provisional approval of price lists.