1996 (10) TMI 263 - AT - Central Excise

Summary

Issues:
1. Whether the appellant correctly declared the invoice value for supply and erection of prestressed concrete pipes and collars.
2. Whether the show cause notice issued to the appellant was barred by limitation.
3. Whether the appellant intentionally inflated transport charges to evade duty.

Analysis:
1. The appellant was involved in supplying prestressed concrete pipes and collars and erecting them on-site. The dispute arose regarding the contract with the Bangalore Water Supply and Sewerage Board. The appellant availed benefits under Notification No. 120/75 by following the self-removal procedure. The issue was that the appellant had deducted more transport charges than actually incurred, inflating the invoice price. The Assistant Collector confirmed the demand, which was upheld by the Collector (Appeals), leading to the present appeal.

2. The appellant's counsel mainly argued that the show cause notice was time-barred. It was noted that a significant portion of the demanded duty period was over six months before the notice, with only a small part falling within the six-month limit. The appellant contended that since the transport charges were estimated during the tender submission, any discrepancies were not intentional but due to potential changes in charges over time. However, the tribunal found that deliberate manipulation of transport charges to reduce the duty liability was evident, dismissing the limitation argument.

3. The tribunal emphasized that the appellant was obligated to declare the correct invoice value, deducting tax and transport charges, as agreed with the Board. Despite potential fluctuations in transport charges, the appellant was expected to reflect the actual costs on the invoices. It was observed that the appellant intentionally overstated transport charges to lower the invoice price and evade duty. The show cause notice explicitly accused the appellant of inflating charges with the intent to evade duty, meeting the requirements of Section 11A of the Act. Consequently, the tribunal upheld the duty demand, rejecting the appellant's contentions and dismissing the appeal.