1998 (5) TMI 123 - AT - Central Excise

Summary

Issues:
Assessment based on invoice value under Rule 173C(11) for a Small Scale Industrial Unit, Allegation of higher factory gate prices affecting depot sales assessment, Validity of demands of duty, Applicability of Rule 173C(11) vis-a-vis Section 4(1)(a), Plea of limitation for demands of duty.

Analysis:
1. Assessment based on invoice value under Rule 173C(11) for a Small Scale Industrial Unit:
The case involved a manufacturer of excisable goods, a Small Scale Industrial Unit, seeking assessment based on invoice value under Rule 173C(11) without the requirement of filing price-lists. The appellant contended that they are entitled to this facility as per the Circular of C.B.E. & C. The Tribunal acknowledged the applicability of Rule 173C(11) to the appellants, emphasizing that each invoice issued by them constitutes a separate price-list for assessment purposes. The Tribunal clarified that Rule 173C(11) does not override Section 4 as long as the invoice value conforms to Section 4 requirements.

2. Allegation of higher factory gate prices affecting depot sales assessment:
The Revenue alleged that the factory gate prices were higher than depot prices, suggesting that all removals should be assessed based on factory gate prices. However, the Tribunal noted that the Revenue did not challenge the compliance of invoice values with Section 4 in the show cause notices. The Tribunal held that the uniformity in prices for all sales, based on a few factory gate sales, would defeat the purpose of the invoice value assessment under Rule 173C(11).

3. Validity of demands of duty:
The Revenue confirmed demands of duty based on the alleged discrepancy in prices between factory gate and depot sales. The lower appellate authority upheld the demands, citing a previous judgment. However, the Tribunal found that the demands were not sustainable since the invoice values met the requirements of Section 4, and no specific violations were identified in the show cause notices.

4. Applicability of Rule 173C(11) vis-a-vis Section 4(1)(a):
The Tribunal clarified that Rule 173C(11) does not override Section 4, as each invoice serves as a price-list for assessment purposes. The Tribunal distinguished the case from the Apex Court's judgment in Indian Oxygen Ltd., emphasizing the importance of invoice value conformity with Section 4. The Tribunal concluded that the impugned order was not sustainable and set it aside.

5. Plea of limitation for demands of duty:
The appellant raised a plea of limitation, arguing that the demands of duty were time-barred. However, the Tribunal ruled that since the assessments were provisional as per the Circular of C.B.E. & C., the plea of limitation was not sustainable. Nonetheless, the Tribunal set aside the impugned order based on the lack of evidence of non-compliance with Section 4 in the invoice values.

In conclusion, the Tribunal allowed the appeal, setting aside the demands of duty and providing consequential relief to the appellants based on the analysis of the issues involved.