1995 (10) TMI 92 - AT - Central Excise

Summary

Issues:
Appeals against Order-in-appeal dated 20-8-1983 of the Collector of Central Excise (Appeals), Bombay - Discrepancy in pricing for sodium silicate supplied to different customers - Allegations of under-invoicing and suppression of facts - Central Excise duty demand - Limitation period - Correct valuation for Central Excise duty calculation - Invocation of extended period of limitation.

Detailed Analysis:

1. Discrepancy in Pricing and Under-Invoicing:
- M/s. Nadiad Silicates & Chemicals (NSC) were involved in manufacturing sodium silicate with a pricing anomaly where the price charged to one customer was significantly lower than others.
- Show cause notices were issued demanding Central Excise duty due to under-invoicing, leading to a demand of Rs. 1,63,185.68.
- NSC argued that the goods supplied at lower prices were manufactured on a job basis after raw material supply by the customer, NIC. The Department was aware of this pricing pattern and duty payment.
- The Asst. Collector observed under-invoicing and confirmed the demand, which was partially upheld by the Collector of Central Excise (Appeals), Bombay.

2. Limitation Period and Suppression of Facts:
- The Revenue appealed on the grounds of limitation due to alleged suppression of facts by NSC.
- NSC contended that the valuation was based on manufacturing cost and profit as per the prevailing Central Excise law understanding before the Supreme Court's decision in Bombay Tyres International.
- The Revenue argued that the declared value was incorrect, and the extended limitation period was justified due to non-disclosure of the job work basis and relationship with NIC.

3. Correct Valuation and Extended Period of Limitation:
- NSC cited the Supreme Court's decision in Cosmic Dye Chemicals case to argue that intent to evade duty must be proven for invoking extended limitation.
- The Appellate Tribunal considered NSC's admission of incorrect pricing for NIC but found no suppression of facts. The valuation was based on manufacturing cost and profit, known to the Department without timely objections.
- The Tribunal agreed with the Collector of Central Excise (Appeals) that the demands were time-barred and not enforceable due to the absence of suppression.

4. Final Decision:
- The Tribunal found no infirmity in the Collector of Central Excise (Appeals) order and rejected both appeals by NSC and the Revenue.
- The correct duty amount was determined at Rs. 70,018.75, and the matter did not require remand based on the valuation issue.
- The Tribunal upheld the previous order, confirming the rejection of both appeals.

This detailed analysis covers the discrepancies in pricing, under-invoicing allegations, limitation period considerations, correct valuation for duty calculation, and the Tribunal's decision to reject the appeals based on the findings of the Collector of Central Excise (Appeals).