1997 (4) TMI 158 - AT - Central Excise

Summary

Issues:
1. Inclusion of cost of fittings in the assessable value of LPG tank wagon bullets.
2. Question of limitation regarding duty demand and invocation of Section 11A of the Central Excises Act.

Analysis:
1. The case revolved around the inclusion of the cost of fittings in the assessable value of LPG tank wagon bullets supplied by the appellants. The appellants had initially declared a price list for each bullet, which was approved by the authorities based on fabrication cost and material cost for BQ steel plates. However, it was later discovered that certain parts required for the bullets were not included in the declared assessable value. The Superintendent issued a show cause notice proposing a duty demand after increasing the cost of steel plates, including the cost of fittings. The appellants argued that the fittings were supplied by the customers and were fitted after the bullets were mounted on underframes, asserting that the cost of fittings should not be included in the assessable value. The Tribunal examined the contract terms, which indicated that the fittings were provided by the customer, IOC, and were integral component parts of the bullets. Consequently, the Tribunal upheld the adjudication order confirming the duty demand in respect of the fittings.

2. Regarding the question of limitation, the appellants raised an alternative plea, arguing that the longer time limit under the proviso to Section 11A of the Central Excises Act was not applicable as the contract clearly disclosed the free supply of fittings by IOC. The Departmental Representative contended that the value of the fittings should be included in the assessable value. The Tribunal noted that the show cause notice did not specifically mention the misdeclaration or suppression of the cost of fittings, despite the original notice proposing the invocation of the extended time limit under Section 11A based on alleged suppression of facts. The Tribunal found that the corrigendum issued by the department omitted crucial allegations related to the fittings, leading to a time bar on those aspects. However, part of the demand within the six-month period preceding the show cause notice was upheld, while the rest of the demand was set aside based on the plea of time bar.

In conclusion, the Tribunal partially allowed the appeal, upholding the duty demand related to the period within six months of the show cause notice and setting aside the remaining demand.