1995 (10) TMI 101 - AT - Central Excise

Summary

Issues Involved:
1. Inclusion of additional charges in the assessable value.
2. Allegation of suppression or misstatement for extending the time limit for demands beyond six months.

Detailed Analysis:

Issue 1: Inclusion of Additional Charges in the Assessable Value

Facts and Arguments:
- M/s. Kashmir Vanaspati Ltd. charged additional amounts for transport, handling, and local taxes for deliveries within Jammu and Kashmir.
- These charges were collected via sale invoices until 15-9-1983 and through debit notes thereafter, which were not included in the RT-12 returns.
- The Department argued that these additional charges should be included in the assessable value, leading to the issuance of show cause notices.

Legal Provisions and Case Laws:
- Section 4 of the Central Excises and Salt Act, 1944 defines the "normal price" at the factory gate as the basis for assessable value.
- The Supreme Court in Voltas Ltd. (1977 (1) E.L.T. (J177)) held that excise duty should be based on manufacturing cost and profit, excluding post-manufacturing expenses like freight and handling charges.
- The Tribunal in Indian Oxygen Ltd. (1989 (41) E.L.T. 610) reiterated that the factory gate price should be the basis for assessment.

Judgment:
- The Tribunal found that the normal price at the factory gate, approved by the Department, should be the assessable value.
- Additional charges collected for sales through depots in Jammu and Kashmir are not includible in the assessable value.
- The appeals by the assessee were allowed, and the appeals by the Revenue were rejected based on these findings.

Issue 2: Allegation of Suppression or Misstatement

Facts and Arguments:
- The Department alleged suppression or misstatement since the debit notes for additional charges were not included in the RT-12 returns post 15-9-1983.
- The assessee argued that there was no suppression or misstatement, as the Central Excise authorities were aware of the additional charges, evidenced by RT-12 returns and a letter dated 21-10-1983.

Legal Provisions and Case Laws:
- Section 11A of the Central Excises and Salt Act, 1944 allows for an extended time limit for demands in cases of suppression or misstatement.
- The assessee cited Indian Oxygen Ltd. (1988 (36) E.L.T. 723) and Voltas Ltd. (1977 (1) E.L.T. (J177)) to support their argument against suppression.

Judgment:
- The Tribunal did not find it necessary to address the limitation issue in detail, as the decision on the merits rendered the question moot.
- The Tribunal concluded that the demand was not justified, thereby making the limitation issue irrelevant.

Conclusion:
- The four appeals filed by the assessee were allowed, and the two appeals filed by the Department were rejected.
- The Tribunal held that additional charges for transport, handling, and local taxes are not includible in the assessable value.
- The issue of suppression or misstatement was deemed irrelevant given the decision on the merits.