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1999 (7) TMI 166 - AT - Central Excise
Issues:
Assessable value inclusion of interest earned on advances, limitation period for demands. Assessable value inclusion of interest earned on advances: The case involved a dispute regarding the inclusion of interest earned on advances in the assessable value of goods manufactured by the appellants. The Department alleged that interest earned on advances should be included in the assessable value as per Rule 5 of the Central Excise (Valuation) Rules, 1975. The appellants argued that the security deposits received did not influence the price of goods and cited relevant case law to support their contention. The Tribunal noted that there was no evidence to prove that the advances affected the price charged by the manufacturers. Since the advances did not impact the price, the Tribunal held that notional interest on advances was not includible in the assessable value. Limitation period for demands: The appellants also raised the issue of limitation, arguing that the demands made by the Department were time-barred as there was no suppression or misstatement. They contended that the demands for the specified periods were hit by limitation as they were being assessed under invoice-based assessment, where advances were mentioned in each invoice. The Tribunal agreed with the appellants, noting that duty was being assessed based on the invoices and there was no suppression or misstatement. Consequently, the Tribunal held that the demands were time-barred and ruled in favor of the appellants. Conclusion: The Appellate Tribunal, after considering the arguments presented by both sides, set aside the impugned order and allowed the appeals filed by the appellants. The Tribunal held that the interest earned on advances was not includible in the assessable value of the goods manufactured by the appellants. Additionally, the Tribunal found that the demands made by the Department were time-barred due to the absence of suppression or misstatement, as the advances were duly reflected in the invoices.
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