1998 (5) TMI 65 - AT - Central Excise

Summary

Issues:
1. Time bar on demand for central excise duty.
2. Applicability of proviso to Section 11A of the Central Excise Act, 1944.
3. Assessment of assessable value and trade discounts for clearances to area sales officers.

Time bar on demand for central excise duty:
The Collector of Central Excise, Pune filed an appeal against an Order-in-Original, claiming that the demand for the period from 1-2-1982 to 31-5-1986 was time-barred due to the absence of suppression of material facts. The respondent, engaged in manufacturing, argued that the show cause notice only pertained to stock transfers to area sales officers, excluding clearances sold to a sole selling agent under a separate agreement. The dispute centered on the assessable value calculation based on trade discounts offered to buyers. The Tribunal noted discrepancies in the discount deductions and the lack of clarity on which clearances were considered in the show cause notice.

Applicability of proviso to Section 11A:
The department contested the applicability of the proviso to Section 11A of the Act, alleging that trade discounts were not uniformly passed on to buyers. The show cause notice referenced an order from 1978 allowing a 10% deduction for assessable value, which the respondent failed to provide data for. The respondent explained that the Assistant Collector's order was based on average trade discounts due to the complexity of actual calculations. The respondent argued that the Assistant Collector's order should be considered as a bona fide compliance, and the proviso should not apply due to the absence of deliberate suppression of facts or intent to evade duty.

Assessment of assessable value and trade discounts:
The core issue revolved around the determination of assessable value for clearances to area sales officers. The respondent followed the 1978 order for a 10% deduction, while the department raised concerns about non-uniform discount practices. The Tribunal emphasized the importance of considering actual discount variations rather than selective cases of less than 10% discounts. The respondent expressed willingness to provide actual data for assessment. Ultimately, the Tribunal found no grounds to interfere, dismissing the appeal based on the respondent's compliance with the 1978 order and the absence of deliberate evasion of duty.