1997 (4) TMI 319 - AT - Central Excise

Summary

Issues:
1. Whether the inclusion of trade discount, interest on receivables, and distribution charges in the assessable value is correct.
2. Whether the demand for duty on certain elements claimed as deductions by the appellant is premature.
3. Whether the assessment was provisional until finalization in March 1997.
4. Whether the appellant had sufficient opportunity to present its case.

Analysis:

1. The appellant, engaged in dye manufacturing, submitted documents claiming certain deductions in the assessable value, referring to a Supreme Court decision. The department provisionally assessed the goods pending a Supreme Court order. The Supreme Court later clarified that trade discount on receivables is not part of the assessable value, but distribution charges are includible. The appellant had already paid duty on the latter two counts, not disputing the liability.

2. The Assistant Collector demanded duty on disallowed discounts, citing lack of information on their conditional nature. The appellant contended that the assessment was provisional until finalized in March 1997, relying on a Bombay High Court decision. The demand for duty can only arise post-finalization, as per Rule 9B and Section 11A.

3. The appellant argued that the assessment was provisional until March 1997, and any duty demand should await finalization. The Departmental Representative claimed the appellant had ample opportunity to present its case. The definition of "relevant date" in Section 11A supports the appellant's argument that duty becomes due only after final assessment.

4. Rule 9B allows for provisional assessment, with duty adjustment upon final assessment. The demand for duty on provisionally assessed goods is premature until finalization. The appeal was allowed, setting aside the impugned order due to premature demand for duty.

In conclusion, the judgment favored the appellant's argument that the demand for duty on provisionally assessed goods was premature, as duty becomes due only post-finalization. The orders demanding duty were set aside, emphasizing the need for final assessment before raising duty demands.