1997 (7) TMI 427 - AT - Central Excise

Summary

Issues:
1. Inclusion of the cost of tyres in the assessable value of trailers cleared from the factory.
2. Time-barred demand for differential duty on tyres.
3. Jurisdictional validity of the show cause notice issued.
4. Justification of penalty imposed.

Analysis:

Issue 1:
The main issue in this case revolves around whether the cost of tyres, procured by customers themselves and fitted by outside mechanics, should be included in the assessable value of trailers cleared from the factory. The Collector (Appeals) held that the cost of tyres is to be added to the assessable value as the trailer includes tyres, and the appellant charged customers for the tyres. The appellant argued that they could not undertake fitting tyres due to lack of necessary tools and equipment. However, the Tribunal upheld the lower authority's decision, stating that the duty for the tyres found with the trailer was justified.

Issue 2:
Regarding the time-barred demand for differential duty on tyres, the appellant contended that the demand for the period from April 1984 to January 1985 was time-barred as the show cause notice was served on 31-8-1985. The Tribunal acknowledged that the demand for the earlier period might be time-barred, but for the clearances in February 1985, the demand was upheld. The appellant's argument on time-barring was not accepted, leading to the dismissal of the appeal.

Issue 3:
The appellant challenged the jurisdictional validity of the show cause notice issued by a Superintendent, alleging suppression to evade duty, as the duty demand pertained to a period starting from April 1984. The appellant argued that the notice was without jurisdiction and the proceedings were legally flawed. However, the Tribunal did not find merit in this argument and upheld the lower authority's decision, leading to the dismissal of the appeal.

Issue 4:
The penalty imposed on the appellant was Rs. 1,000, which the appellant claimed to be excessive. The Tribunal, however, found the penalty to be justified and not disproportionate. Therefore, the penalty was maintained, and the appeal was dismissed on this ground as well.

In conclusion, the Tribunal upheld the decision of the lower authority, ruling in favor of including the cost of tyres in the assessable value of trailers, rejecting the time-barred claim for duty demand, dismissing the challenge on jurisdictional grounds, and maintaining the penalty imposed on the appellant.