1994 (12) TMI 203 - AT - Central Excise

Summary

Issues:
1. Inclusion of post-manufacturing expenses in the assessable value.
2. Allegations of suppression and invoking a larger period for duty demand.

Analysis:

Issue 1: Inclusion of post-manufacturing expenses in the assessable value
The case involved M/s. Swarup Vegetable Products Industries Limited, charged Rs. 4 per tin as distribution charges over the approved assessable value. The central issue was whether these charges should be included in the assessable value for determining Central Excise duty. The party argued that post-manufacturing expenses, including distribution charges, should be excluded based on prevailing case law. The appellant cited various judgments, such as Hindustan Lever Ltd. and Atma Steels Pvt Ltd., to support their contention that certain expenses beyond the factory gate are admissible deductions. They emphasized that these expenses were shown separately and approved by the Department. The Department, however, argued that the charges were not declared in the approved price list and constituted suppression of facts. The Tribunal referred to the Supreme Court's decision in Bombay Tyre International, which clarified that only specific deductions are permissible from the wholesale price value. The Tribunal held that the Rs. 4 per tin charges were not post-manufacturing expenses but part of the assessable value, as they were not covered under the permissible deductions. Therefore, the charges were to be included in the assessable value for duty calculation.

Issue 2: Allegations of suppression and invoking a larger period for duty demand
The appellant contended that the demand was time-barred as the show cause notices were issued beyond six months without any allegation of suppression. They argued that the larger period could not be invoked without evidence of suppression. The Department, on the other hand, claimed that the charges were concealed, leading to a clear case of suppression. The Tribunal examined the timing of the show cause notices and found that they were issued without any mention of suppression or invoking the larger period. As a result, the Department was not justified in demanding duty beyond the six-month period. The Tribunal upheld the Collector's decision to restrict the short levy amount to Rs. 33,947.65, as mentioned in the show cause notices. The appeals and cross-objections were disposed of based on these findings, affirming the Collector's order in this regard.

In conclusion, the Tribunal ruled in favor of including the distribution charges in the assessable value and dismissed the Department's attempt to demand duty beyond the permissible period without evidence of suppression. The judgment highlighted the importance of adhering to specific deductions allowed under the law and the limitations on invoking a larger period for duty demand without proper justification.