1990 (11) TMI 275 - AT - Central Excise

Summary

Issues:
1. Inclusion of the cost of cylinders in the assessable value of oxygen and dissolved acetylene gas.
2. Bar on the show cause notice dated 7-12-1983 for the period prior to 6-6-1983.

Analysis:

Issue 1: Inclusion of the cost of cylinders in the assessable value
The appellants were involved in the manufacture of vanaspati refined oils, soaps, and industrial gases, including oxygen and dissolved acetylene gas. The dispute revolved around the cost of metal cylinders used for packing these gases. The Department issued show cause notices questioning the inclusion of Rs. 2.30 per cubic meter for oxygen gas and Rs. 12 per cubic meter for dissolved acetylene gas in the assessable value. The Assistant Collector and the Collector (Appeals) upheld the demands. However, the appellants argued that the cost of durable and returnable cylinders should not be part of the assessable value, citing legal precedents. They contended that the cost of packing should be excluded as per Section 4(4)(d)(i) of the CESA, 1944, supported by judgments like Collector of Central Excise v. Indian Oxygen Limited and Collector of Central Excise v. Hindustan Gas & Industries Limited. The Tribunal agreed, emphasizing that the cost of such cylinders cannot be included in the assessable value of the gases.

Issue 2: Bar on the show cause notice dated 7-12-1983
The appellants raised a limitation defense against the show cause notice dated 7-12-1983, which demanded duty for the period from May 1979 to October 1983. They argued that there was no suppression or misstatement on their part, as all relevant information was provided to the Department. The Tribunal concurred, holding that the notice was barred for the period prior to June 6, 1983. The approval of price lists by the Department and the detailed explanations provided by the appellants regarding the cost of packing supported their position. The Tribunal found no merit in the allegation of suppression and ruled in favor of the appellants on this issue.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals, directing the exclusion of the cost of packing from the assessable value of oxygen and dissolved acetylene gas. The limitation defense against the show cause notice dated 7-12-1983 was upheld, providing relief to the appellants on both issues.