1997 (2) TMI 289 - AT - Central Excise

Summary

Issues Involved:

1. Whether the show cause notice dated 12/17-4-1984 is barred by time.
2. Whether the allegation of suppression of facts by the appellants is substantiated.
3. Whether the assessments were provisional pending approval of the price list.
4. Applicability of the judgment in Samrat International (P) Ltd. v. Collector of Central Excise.

Issue-wise Detailed Analysis:

1. Whether the show cause notice dated 12/17-4-1984 is barred by time:

The appellants argued that the show cause notice issued beyond the six-month period is time-barred. They contended that the department was aware of the higher realizations from their customers and that the normal time limit of six months should apply. The appellants presented evidence showing continuous correspondence with the department, which indicated that the department was fully aware of the appellants' pricing and duty realization practices. The Tribunal found that the department had sufficient knowledge of the appellants' practices and failed to act within the normal time limit, thus rendering the show cause notice time-barred.

2. Whether the allegation of suppression of facts by the appellants is substantiated:

The department alleged that the appellants suppressed facts by not declaring higher realizations in their price lists. The appellants countered this by showing that they had declared values based on "manufacturing cost plus manufacturing profit" and had communicated this to the department. The Tribunal noted that the department had checked the appellants' sales bills and was aware of the higher realizations. The Tribunal concluded that the allegation of suppression of facts was unsustainable given the evidence of the department's knowledge and the appellants' disclosures.

3. Whether the assessments were provisional pending approval of the price list:

The department claimed that the assessments were provisional pending approval of the price list, relying on a purported letter dated 9-3-1982 from the Assistant Collector. The appellants denied receiving this letter and argued that no provisional assessment procedures, such as executing a bond, were followed. The Tribunal found that there was no evidence of provisional assessments being ordered or bonds being executed. Consequently, the Tribunal held that the finding of provisional assessments was without evidence and struck it down.

4. Applicability of the judgment in Samrat International (P) Ltd. v. Collector of Central Excise:

The department argued that the clearances pending approval of the price list were provisional, citing the Samrat International case. The appellants contended that the Samrat International judgment pertained to refund claims and was not applicable to demand cases under Section 11A. The Tribunal observed that the Samrat International case involved a situation where excess payment was made provisionally, which was not the case here. The Tribunal concluded that the ratio of Samrat International did not apply to this case, as the facts and circumstances were different.

Conclusion:

The Tribunal found that the show cause notice was time-barred and that the allegation of suppression of facts was not substantiated. The Tribunal also held that the assessments were not provisional and that the Samrat International judgment was not applicable. Consequently, the Tribunal set aside the duty demanded in the impugned order as barred by time.