1990 (12) TMI 255 - AT - Central Excise

Summary

Issues Involved:
1. Validity of Show Cause Notices.
2. Time-barred Demands.

Issue-wise Detailed Analysis:

1. Validity of Show Cause Notices:

The primary issue in these appeals is whether the show cause notices issued by the Department are valid in the eyes of the law. The Department filed a Review Petition under erstwhile Section 36(2) of the Central Excises and Salt Act, 1944, which was later transferred to the Tribunal. The contention of the Revenue is that the Appellate Collector of Customs failed to appreciate the provisions of Section 4 of the Central Excises and Salt Act, 1944, for arriving at the assessable value. The Revenue argued that the only abatement allowed from the selling price should be the Central Excise duty actually paid, and since the duty was paid at a reduced rate, the assessable value should be higher.

The respondent-assessee argued that the procedure followed by them was correct as per the law at the time of the show cause notice issuance. They contended that the retrospective amendment to Section 4(4)(d)(ii) of the Act did not necessitate a fresh show cause notice. The Tribunal noted that the amendment brought by Section 47(2) of the Finance Act, 1982, validated any action taken during the specified period, making the revised show cause notice issued by the Government of India valid. Consequently, the demands raised in the show cause notices were deemed valid in law and not hit by the period of limitation.

2. Time-barred Demands:

The second issue is whether the demands are time-barred. The Tribunal examined the demands raised through various show cause notices and found them to be within the six-month period, thus not hit by the period of limitation. The Tribunal referenced the case of Andhra Pradesh Paper Mills Ltd., where similar demands were upheld by the Division Bench of the Andhra Pradesh High Court after the retrospective amendment to Section 4(4)(d)(ii). The Tribunal concluded that the demands raised in the show cause notices dated 19-1-1979, 17-4-1980, and 14-3-1980 were valid and not time-barred.

However, the Tribunal acknowledged that certain demands were raised on the respondents based on the assessment of RT 12 returns without issuing show cause notices. The Tribunal cited the Supreme Court's decision in Collector of Central Excise, Baroda v. Kosan Metal Products Ltd., which held that demands made on RT 12 returns without issuing show cause notices are not valid. Consequently, such demands were set aside.

Conclusion:

The Tribunal set aside the impugned order and restored the Assistant Collector's orders to the extent they covered demands made following the issue of show cause notices and adjudication proceedings. However, demands made on RT 12 returns without issuing show cause notices were not sustained and were set aside. The appeals were disposed of accordingly.