1996 (5) TMI 270 - AT - Central Excise

Summary

Issues: Allegation of suppression of facts for determining assessable value and duty liability; Time-barred show cause notice; Imposition of penalty

The case involved the appellants supplying grooved copper contact wire (G.C.C. Wire) and dropper wire to the railway electrification department of Indian railways. The department alleged that the appellants had suppressed elements in determining the cost of raw materials, resulting in a duty loss of Rs. 13,63,482.56. The department claimed that the appellants did not include freight and insurance charges, actual price of raw materials, excise duty on intermediate products, and other costs in the assessable value. The show cause notice issued on 21-10-1986 for the period of 1982-83 to 1984-85 was challenged as time-barred by the appellants.

The appellants argued that the allegation of suppression and wilful misstatement was unfounded. They contended that the price list submitted along with the contract to the department was duly approved, and all relevant costs were included as per the contract terms. The appellants asserted that they acted as intermediaries, conveying the cost of raw materials provided by the railways, and were not responsible for determining the costs. They claimed that the show cause notice was time-barred and should be set aside.

The department, represented by the ld. SDR, maintained that the appellants had not correctly declared the prices in the relevant price list, as stated in the show cause notice. They argued that the allegations of suppression were valid and that the duty demand was justified based on the discrepancies in the declared value of raw materials.

Upon review, the Tribunal found that the allegations of wilful misstatement and suppression of facts against the appellants were not substantiated. The Tribunal noted that the appellants acted as intermediaries, conveying the cost information provided by the railways, and were not responsible for determining the elements to be included in the cost of raw materials. Therefore, the demand for duty was considered time-barred, and no penalty was imposed on the appellants. The appeal was disposed of in favor of the appellants, and the penalty was not imposed.

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