9911796707
TMI Blog1987 (12) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants, the departmental authorities charged the appellants with declaration of lower price in the price list filed as they were found to have sold the goods at higher prices than those declared from their various depots in the country. The appellants before the issue of show cause notice were asked to furnish information regarding the prices at which goods were sold from their different depots and quantum thereof. They did not furnish the information. In the absence of this information and any information regarding freight charged in respect of the goods cleared from the factory to the depots from where these were sold, the duty demanded in terms of the show cause notice was on the basis of highest price applicable in the case of sale from depots located farthest and short payment of duty of Basic Rs. 54,51,667.00 and special Rs. 81,342.72 was indicated. This duty demand was raised for the period 18-6-1977 to 30-9-1980 under the show cause notice issued on 29-11-1980. The appellants in their reply to the show cause notice stated that this notice was received by them only on 18-8-1981. The appellants resisted the demand on various legal grounds and pleaded that price as declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He pleaded that the appellants filed the price list based on their understanding of the law as interpreted by the Courts in the light of Voltas judgment. He pleaded there was no intention to evade payment of duty and the price declared in the price list was in the bonafide belief that the Calcutta City price as declared by them represented the cost of manufacture and manufacturing profit plus some additional elements were also included therein. He pleaded as per understanding of the law then and as held by various High Courts, the Central Excise duty was leviable on cost of manufacture plus manufacturing profit. In their case, he pleaded, the Calcutta City price declared by them was more than these two elements. In this view of the matter, therefore, there could be no short levy and much less any intent to evade payment of duty. He stated that the Calcutta city price included, among other things, element of freight, insurance and even erection charges. He stated that price differential between the Calcutta City price and the price prevailing at other depots was not much and basically it represented the freight for goods up to the depot and some other allied charges. He was asked b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated the understanding of law at the relevant time was such that nobody could be blamed when a genuine price obtaining nearest to the factory was declared. He conceded this letter of 14-10-1977 which he had brought to our notice was not placed before the Collector as it was only after the Collector passed his order they checked up all the records and this was found only after their appeal had been filed before the Tribunal. 4. In regard to the alleged removal of weighing machine without payment of duty, he pleaded, that they had pleaded before the Collector that some of the bigger machines they had removed in parts and each such removal of the parts of the machines had been taken to be a separate machine. He pointed out that the lower authority conducted selective check of the documents and if all the facts had been taken, note of by the said authority, it would have become clear that there had not been removal of even a single machine without payment of duty from the factory. He pointed out that excluding the alleged clandestine removals, based on the Collector s findings on assessable value of machines, the demand that would survive would be only Rs. 22 lakhs. He pleaded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moval and even from their depot at Calcutta. He pleaded that the appellants in the price list filed did not furnish all the information in relation to their machines and sales pattern and the Assistant Collector accepted their declaration at the time of the approval of their price as given in the price list filed by them. He drew our attention in this regard to the Price List No. 1 of 1977 as approved by the Assistant Collector. He stated that there was no mention in the price list about their sales pattern. He pleaded that the appellants plea that they had furnished price pattern vide their letter dated 14-10-1947 and therefore no mala fide intention could be attributed to them, cannot be accepted on the face of it. He pointed out that this information was not furnished to the jurisdictional Assistant Collector who was to approve the price list and was not even placed before the Collector at the time of adjudication. He, however, could not say whether this letter was received in the office of the Assistant Collector, Calcutta-XII Division. A look at the letter shows that the same was sent to the Assistant Collector and the receipt was given by the office of the Assistant Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged in respect of sale of all their machines and the customers had no choice but to pay these charges. He stated that even though freight and insurance charges are required to be abated from the sale price, the duty charged by the appellants on these charges will have to be included in the assessable value. He stated that since the appellants had not revealed that they were collecting duty on these elements this amounted to mis-declaration and this therefore constitutes sufficient reason for invoking longer time limit of five years for raising the demand. He drew our attention to the statement of sales of machines filed by the appellants and pointed out that in respect of some of the machines there was no sales at Calcutta. He stated that the appellants have been issuing gate passes in respect of sales at Calcutta but the Department had no knowledge that, in fact, the sales were being made from their depots charging higher prices. He filed some documents showing the extra duty charged by them. It is seen from some of these invoices that the appellants had charged Central Excise duty from their customers based on depot prices of respective region while they paid duty to the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore verification in respect of these was called for. He stated in as much as the number of factors were required to be examined in the present case including the number of machines removed he has no objection to the remand of the case. He pleaded so far as the levy of the penalty was concerned, the same was leviable as the appellants had not given the true declaration of the sales prices in the price lists for the purpose of assessment as required under the law. He pleaded that longer time limit of five years was available for raising the demand in view of the plea above. He also stated that while the appellants claimed that they received show cause notice on 18-6-1981, the Department had no evidence to show that the same had been served earlier. 8. Learned Senior Advocate for the appellants in reply stated that on verification of the record it was found extra Central Excise duty had been collected on freight and insurance and some other charges in respect of sales made from one depot but that was not the position in respect of all their sales. He stated under contract of sale to the customers sale was at a fixed price plus taxes and in case any extra duty was charged, cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no warrant in selecting any other place for arriving at assessable other than as Calcutta and that Calcutta City prices should be adopted for the purpose of arriving at assessable value. He cited the case of State of Karnataka v. Union of India and Others : 1978 E.L.T. (J 564). He stated that there was no rationale for adopting higher price of a different depot when price for Calcutta City was available. He stated that if in law Calcutta price was not found acceptable, at best, the appellants could be held guilty of only wrong interpretation of the law but there was no intention on their to evade payment of duty. He stated that the Revenue had shown that only in case of few invoices the excise duty had been charged on some elements over and above the sale price of machines from the customers in the Bombay region only. He stated this was not done in all cases and it was for the Revenue to establish this was the position in all cases. He pleaded since this was done on in few cases the same should be ignored and this should not be taken as tantamounting to suppression of facts with a view to evade payment of duty. On a query from the Bench, he confirmed that the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct price in respect of such of those machines which were not sold ex-Calcutta depot. There is nothing on record and in the documents filed by the appellants that information about the prices charged in respect of sales from various depots was made available to the department. The Department had no way to find out as to the nature of their actual sale operations from where the sales were actually taking place and at what price. When actual sales price of goods was available there was no warrant in the appellants filing the prices which were more notional in nature. The appellants have not placed before us the elements which go into their standard price and also those in their depot prices. This information was asked for by the Bench during the course of hearing. The appellants also did not place this information before the Collector to satisfy him that the price declared by them was in terms of Section 4(1)(a). The appellants have pleaded that as early as on 14-10-1977 they had informed the Assistant Collector with a copy of the same to the Superintendent about their pricing policy. The Revenue has not been able to say whether this letter has been received by them or not. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed in this letter of 13-10-1977. A detailed exercise would therefore be required to be done in this regard. The Revenue authorities have also been remiss in not following up the information about the pricing policy furnished by the appellants vide their letter dated 13-10-1977. From this letter it appears that the Deputy Collector had visited the appellants factory and felt it necessary that their pricing policy was required to be gone into. We find that the authorities had let the matter lie over for a long time before initiating action. We therefore in the facts and circumstances of the case he1d that in view of the pricing pattern of the appellants no clear basis for arriving at assessable value in terms of Section 4(1)(a) has been revealed. Normally in case Calcutta city price satisfies all the parameters laid down under Section 4(1)(a) that should form basis for assessment of the goods. But in the instant case, according to the Revenue, a large number of sales of the same machines have taken place at centres other than Calcutta. If that be so, an exercise will have to be done to find out whether the same machines are sold at Calcutta and at other depots and whether after giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at the factory gate and in case the sales are made from the depot then the sale price at the depot is relevant price to be declared as in terms of Section 4(2) such depot price with other deductions admissible under the law would be the assessable value. From the conduct of the appellants we hold that the appellants intended to withhold the information with a view to pay lower duty. It may well turn out that after taking the parameters for arriving at assessable value as laid down by the Hon ble Supreme Court assessable value based on the information furnished by the appellants in the price list may be correct but this would not be for the reason that the appellants furnished correct information under the law. If the duty payable as determined by the lower authorities in view of above is found to be higher, in view of what we have observed, under the law extended time limit of five years would be available for raising the demand. So far as the date of service of the show cause notice is concerned we would like to observe that the appellants pleaded that the same was received on 18-6-1981 and the Revenue has not been able to show that this was not so and that the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
