1998 (3) TMI 300 - AT - Central Excise

Summary

Issues:
1. Interpretation of provisions of Rule 173C(11) regarding declaration of goods' price for duty determination.
2. Whether the show cause notice for charging duty on extra realisation made by the respondents was barred by time under Section 11A of the Central Excises & Salt Act, 1944.
3. Validity of demand issued by the Revenue within three months of discovering extra realisation.
4. Requirement of issuing a show cause notice under Rule 173C(11) for demanding duty on extra amounts realised by the assessee.
5. Applicability of the Supreme Court judgment in the case of Seraikella Glass Works to the present case.

Analysis:

1. The case involved the interpretation of Rule 173C(11) where an assessee could declare the price of goods sold to determine the duty payable. If the declared price did not represent the value under Section 4 of the Central Excise Act, the proper officer could reassess the duty. The respondents were charging duty at the tariff rate but did not submit invoices along with returns. The show cause notice for charging duty on extra realisation was issued beyond six months, but the lower appellate authority held it as barred by time. The Revenue challenged this finding.

2. The Revenue argued that the demand was issued within three months of discovering the extra realisation, well within the time limit. They contended that under Rule 173C(11), the assessment made on returns was sufficient for demanding duty without the need for a show cause notice. Citing the Supreme Court's judgment in Seraikella Glass Works, the Revenue sought to set aside the lower appellate authority's decision on the demand being time-barred.

3. The Advocate for the respondents reiterated the lower appellate authority's finding. However, the Tribunal observed that the show cause notice was issued within a reasonable time of discovering the extra realisation. They agreed with the Revenue's argument that assessment under Rule 173C(11) was adequate for demanding duty, as supported by the judgment in Seraikella Glass Works. Consequently, the Tribunal set aside the lower appellate authority's decision and allowed the Revenue's appeal regarding the time-barred demand for the specified period.

4. The Tribunal's decision emphasized the timely issuance of the show cause notice and the sufficiency of assessment under Rule 173C(11) for demanding duty. By relying on the precedent set by the Supreme Court's judgment in Seraikella Glass Works, the Tribunal concluded that the demand for duty was valid and not time-barred. The appeal was allowed in favor of the Revenue based on these considerations.