1994 (4) TMI 168 - AT - Central Excise

Issues Involved:

1. Inclusion of the value of plastic caps in the assessable value of collapsible aluminium tubes.
2. Invocation of the extended period of limitation under Section 11A of the Central Excises and Salt Act, 1944.
3. Reduction of penalty amount.

Issue-wise Detailed Analysis:

1. Inclusion of the Value of Plastic Caps in the Assessable Value of Collapsible Aluminium Tubes:

The appellants argued that the value of the plastic cap, a bought-out item, should not be included in the assessable value of the collapsible aluminium tube. They relied on the Tribunal Decision in the case of Metal Box of India Ltd. v. Collector of Central Excise, which was confirmed by the Hon. Supreme Court. The revenue, however, contended that the collapsible aluminium tube cannot be used without the cap, making it non-marketable without the cap. Therefore, the value of the cap should be included in the assessable value.

The Tribunal, after analyzing various decisions and submissions, held that the cost of the caps is rightly includible for arriving at the assessable value of the aluminium collapsible tubes. However, there was a dissenting opinion from the President, who considered the plastic cap as an accessory and thus, its value should not be included in the assessable value. He relied on the Bombay High Court decision in Extrusion Processes Pvt. Ltd. v. Union of India, which held that the cost of caps is not to be included in the assessable value of extruded tubes.

2. Invocation of the Extended Period of Limitation under Section 11A of the Central Excises and Salt Act, 1944:

The appellants contended that the demand was hit by limitation as there was no suppression of any fact. The demand-cum-show cause notice was issued on 23-4-1992 for the period April 1990 to June 1991. The Tribunal noted that the appellants had stopped including the value of caps and the labor charges for fitting the cap on the tubes in the assessable value without any intimation to the department or approval from the proper Central Excise Officer. This non-inclusion came to light only through departmental investigations, indicating suppression of facts. The Tribunal referred to the Hon. Supreme Court's observations in cases like Collector of Central Excise v. Chemphar Drugs and Liniments and Jaishri Engg. Co. (P) Ltd. v. Collector of Central Excise, which stated that suppression of facts is a question of fact depending on the circumstances of each case. Consequently, the Tribunal upheld the invocation of the extended period of limitation under Section 11A of the Act.

3. Reduction of Penalty Amount:

The Tribunal, considering the circumstances of the case, reduced the penalty amount from Rs. 2000 to Rs. 500. The appeal was otherwise rejected, and the impugned order was confirmed. The cross-objections filed by the Revenue were also disposed of accordingly.

Separate Judgments Delivered:

The President, in his separate judgment, disagreed with the majority opinion regarding the inclusion of the value of plastic caps in the assessable value. He emphasized that the plastic cap is an accessory and should not be included in the assessable value. He relied on the Tribunal's decision in Metal Box of India v. CCE and the Bombay High Court's decision in Extrusion Processes Pvt. Ltd. v. Union of India. However, he concurred with the majority opinion on the limitation aspect.

Final Order:

In view of the majority opinion, the appeal was allowed, and the value of the plastic cap was not included in the assessable value of the collapsible aluminium tube.

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