2000 (12) TMI 525 - AT - Central Excise

Summary

Issues:
1. Demand of duty on interest-free advances and handling service charges.
2. Inclusion of handling charges in the assessable value of the final product.
3. Application of limitation period for assessments.

Demand of Duty on Interest-Free Advances and Handling Service Charges:
The appellants were issued a show cause notice for demanding duty on interest-free advances and handling service charges received from customers. The Commissioner of Central Excise, Calcutta dropped the demand related to interest-free advances but confirmed the duty demand on handling charges. The Commissioner considered the handling charges to include transportation and packing charges, concluding that by not disclosing these charges, the appellants evaded central excise duty. The appellants did not dispute the inclusion of these charges in the assessable value of the final product. The Commissioner observed that the assessments were provisional until finalized, indicating that the time bar would operate from the finalization of assessments.

Inclusion of Handling Charges in the Assessable Value:
The appellant argued that the handling charges recovered were for packing, freight, and loading charges, including credit charges for interest on deferred payments. The Commissioner confirmed the duty demand on the balance of handling charges, treating them as loading charges. The appellant contended that the balance of handling charges represented interest on receivables, but failed to provide evidence supporting this claim. The Tribunal found that while a part of the handling charges related to packing and freight, the appellant did not substantiate the balance as interest charges, leading to the confirmation of duty demand on handling charges.

Application of Limitation Period for Assessments:
The appellant challenged the Commissioner's conclusion on the provisional nature of assessments, arguing that they were not given an opportunity to rebut this finding. The appellant highlighted their billing practices being known to the Revenue through previous show cause notices and adjudications. The Tribunal noted the lack of evidence regarding the provisional nature of assessments and the previous adjudication orders not being before them. Consequently, the matter was remanded to the original adjudicating authority for fresh consideration on the limitation issue, taking into account the provisional assessments and the Revenue's awareness of the billing patterns during the relevant period.

In conclusion, the appeal was rejected on the merits regarding the duty demand but remanded for further consideration on the limitation aspect. The Tribunal emphasized the need for a detailed review of the limitation issue in light of the provisional assessments and the Revenue's familiarity with the appellant's billing practices during the relevant period.