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TMI Blog1995 (2) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... nexure-BI, II, III etc. that quantum determined towards freight, cost of Rubber Rings, lowering, laying, jointing, testing etc. complete has been deducted from the contracted price and differential assessable value has been worked out. The duty demanded has therefore, been worked out on proper footing. 19. It is argued that figures taken into account in respect of freight, cost of rubber rings, and amounts payable to contractors, while computing the differential assessable value in the show cause notice are hypothetical and there is wide difference with the actual expenditure incurred. The basis of these computations were conveyed to the noticee and while challenging the same it was incumbent upon them to establish their claim by producing relevant records, documents etc. Mere claim without supporting records and documents, which they have not furnished, is not acceptable. 20. As regards the charge of conditional discount of Re. 1.20 ps. per P.S.C. Pole supplied to M.S.E.B. on contract basis; the assessee have claimed that it is neither discount nor conditional discount but reduction in sale price to which they are entitled and there is nothing irregular in the deal, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (Rupees One Lakh only) on M/s. Koyana Prestressed Products Pvt. Ltd., Satara under Rule 173Q(1) of the Central Excise Rules, 1944. I confiscate the land, building, plants, machinery, material etc. of the assessee under Rule 173Q(2) but allow them to redeem the same on payment of Rs. 50,000/- (Rupees Fifty Thousand only). 2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of prestressed cement pipes and poles. The appellants are declaring assessable value of their products in Format Pt. VII on the plea that it is a works contract for providing lowering, laying and jointing etc.; that the contract is not divisible and therefore the appellants were not able to file price list. The appellants submitted price list supported by a certificate issued by a Chartered Accountant/Cost Accountant. However, the Department was of the view that the prices declared by the appellants did not represent the real value or full realisation of the value of excisable goods inasmuch as the appellants were alleged to have : (a) Shifted the assessable value of PSC pipes to the items viz., freight, lowering, jointing, rubber rings etc. by inflating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract for erection and installation of elevators was a composite and indivisible contract for work and labour and that it cannot be regarded as a contract for sale of goods. Government further observe that elevators and escalators installed in buildings are firmly affixed to the building and are not intended to be moved and accordingly could not merit to be called goods. Government, therefore, hold that the elevators and escalators erected and installed by the petitioners could not be considered as goods and hence would not be assessable under Tariff Item 68 of Central Excise Tariff. Government, would, however make it clear that the component parts of the elevators and escalators manufactured and cleared from their respective factory(ies) would be chargeable to duty at the appropriate rates. However, no further duty is chargeable when these component parts are assembled at site to erect or instal and commission the elevators and escalators in buildings because at that stage the elevators and escalators become a part of the immovable property." It was, therefore, argued that there is no question of charging further duty on the pipes etc. which go in the installation of the pipeline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants referred to Annexures A, B and C pertaining to actual expenditure incurred, total contract receipts and reconciliation of assessable value declared. 6. On the question of admissibility of discount at a rate of Re. 1.20 per pole paid to MSEB, the appellants argued that as part of the contract, MSEB was supposed to supply the cement at Satara and the appellants had agreed to give a rebate of Re. 1.20 per pole. It was contended that it was a discount and not a conditional discount and that the appellants were entitled to the sale of poles at a reduced price and that there was nothing irregular in the deal. The third allegation regarding recovery of Gentry Charges at a rate of 50 ps. per pole, the appellants submitted that the amount was includible in the assessable value and that this mistake had occurred because they were not guided properly. 7. Shri K.K. Anand, ld. Advocate appearing for the appellants submitted that the assessable value of their products after the year 1981 was worked out by them after unloading the contract price of post-manufacturing/non-manufacturing expenses; that on 25-3-1981, the appellants filed a price list effective from 24-3-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975 for the purpose of determination of assessable value. Thus the position was very well known to the Department and there was neither any wilful mis-statement nor suppression of any fact for the purpose of extending the period of demand beyond six months. The ld. Counsel submitted that the demand is hit by limitation. 9. Now coming to the merits of the case, the ld. Counsel submitted that the show cause notice is confined to three issues. Issue No. 1 is that a part of assessable value of PSC Pipes was collected in the guise of freight, laying, lowering, jointing rubber rings etc. Issue No. 2 is that the appellants availed conditional discount of Rs. 1.20 per pole and the issue no. 3 is that the appellants recovered Gentry charges at the rate of 50 paise per pole. 10. The ld. Counsel submitted that the assessable value of the goods of the appellant was arrived at by the Asstt. Collector after proper enquiries and verification of the Chartered Accountant's certificate; that the assessable value is required to be arrived at only of excisable goods and that Section 4 of the CESA, 1944 is applicable only to excisable goods and not to civil work and non-manufacturing acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Gentry charges fairly conceding that this was includible in the assessable value. 13. Shri A.K. Singhal, the ld. JDR submitted that the Collector has exhaustively dealt with every point raised by the appellant in his Order-in-Original; that the exact issue involved is to determine the correct assessable value of PSC Pipes supplied by the assessees against a project contract for providing lowering, laying, jointing with suitable rubber ring, testing etc. complete. The ld. JDR submitted that in most of the contracts under consideration, there was a clause reading "Providing, lowering, laying, jointing with suitable rubber rings etc. completing of PSC pipes" for which composite rate per running metre was contracted. The ld. JDR therefore, submitted that most of the contracts clearly specified what the composite price consisted of and that the Collector had rendered a finding "I find from the records that frieght paid for transport of pipes from factory to the site is ascertainable. Similarly, costing of rubber rings can be ascertained from purchase vouchers. The expenses incurred on lowering, laying, jointing can also be ascertained for the obvious reasons that this job is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in Para 18 of the Order-in-Original, the ld. Collector observed : "The contention that `rate per R.M.T. contracted' has been taken in the show cause notice as `Sale price of pipe' is also not correct. I find from the work sheet of the show cause notice and Annexure B I, II, III etc. that quantum determined towards freight, cost of Rubber Ring, lowering, laying, jointing, testing etc. complete has been deducted from the contracted price and the differential assessable value has been worked out. The duty demanded has therefore been worked out on proper footing." 14. On the question of hypothetical assessable value shown in the show cause notice, the ld. D.R. submitted that the Collector held that while challenging the same, it was incumbent upon them to establish their claim by producing relevant records, documents etc. Mere claim without supporting records and documents which they have not furnished is not acceptable. 15. On the question of conditional discount of Re. 1.20 per pole, the appellants had claimed that it is neither discount nor conditional discount but reduction in sale price. The ld. JDR submitted that the Collector had rendered a finding that "Whatsoeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioning and erection of the pipes at the site and cost of some other bought out items, and therefore the only course for determining the correct assessable value of the pipes was the Chartered/Cost Accountant's certificates. In support of this contention, they submitted that their first price list submitted to the Asstt. Collector was worked out backwards, i.e., from the composite price of the running meter of the pipes and poles various deductions were made on account of the cost of bought out items, the expenses incurred on the post clearance activities of the PSC Pipes/poles. They referred to the price list submitted the case adjudicated by the Asstt. Collector on the basis of the Chartered Accountant's certificae. They submitted that as these price lists were finally approved and there is no appeal against the approval of these price lists right upto 1986 commencing from 1981 they become binding on the Department. Further argument of the appellants was that the Department has calculated the figures even in the case of lowering, laying, jointing with suitable rubber rings, testing etc. on hypothetical basis and the Collector did not consider their plea that the expenses on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the figures worked out by the Department cannot be termed as actuals. Even in respect of the three items of work namely freight paid to the transporters, cost of bought out items and expenditure incurred in installation and erection of pipes at the site, as against this we observe that the appellants had furnished statements showing contractwise cost of various items namely cost of transport, expenses on site work, travelling expenses, miscellaneous expenses, material purchased, pipe shifting, salary/ wage, Central Excise and Taxes, cost of rubber rings etc. The Collector has rendered a finding that the assessee did not produce the supporting documents to show that the expenses shown in the statements were actual expenses. Examining the contentions raised by the two sides, we observe that the Department has worked out the expenses on the basis of averages whereas the appellants have submitted statements where they have stated that they were the actual expenses on various items of work enumerated therein. There is wide variation in the expenses worked out by the Department on the basis of averages and the expenses worked out by the appellants showing that they were the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accepted after proper verification, the question of invoking the Proviso to Section 11A does not arise. However, from the evidence on record and the findings given by the Collector which have not been controverted, it is evident that the certificates were given without verifying the books and that such books were not maintained by the appellants and therefore, the veracity of the certificates was in doubt and this came to light only after detailed investigation. We, therefore, hold that there was suppression and wilful mis-statement to evade payment of duty and therefore, the Proviso to Section 11A of the Act has rightly been invoked and the demand is not hit by the limitation. 27. Having regard to the above findings, we hold that this is a fit case for remand to the original adjudicating authority on the ground that there should be a definite finding on the actual expenses incurred in respect of freight for transportation of pipes to the site, the cost of lowering, laying, jointing etc. of the pipes and the cost of the bought out items. We accordingly allow the appeal and remand the case to the Collector of Central Excise, Pune for de novo adjudication after observing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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