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TMI Blog2007 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... n credit, to give interest-free security deposit. The price-lists filed were approved provisionally. 2.On the basis of information that cigarettes were being under-valued by the respondents on account of indirect consideration flowing from the aforesaid deposit scheme, necessary investigation was conducted and statements of officers of the respondents were recorded, and the statements revealed mainly that (i) The price charged from the wholesale dealers opting for the scheme and also from those who had not opted for the scheme during the entire period, remained the same, (ii) The amount of security deposit was utilised in the procurement of raw material etc., (iii) The pricing of cigarettes mainly depended on the competition being faced in the market, (iv) The scheme was introduced following the increased production capacity and it was intended that the scheme would meet the objectives of ensuring that the entire stock was lifted by the dealers and that the dealers were assured of regular supply during the currency of their agreements with the respondents, (v) Increase or decrease in prices mainly influenced by market conditions did not exclusively depend upon the costing, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of penalty. The Commissioner of Central Excise, Delhi, vide order No. 3/96, dated 15-7-1996 rejected the contention of the assessees that the notices were invalid on the ground that they had been issued prior to finalisation of provisional assessment and directed expeditious finalisation of provisional assessment. He clarified that this was only an interim direction in the course of adjudication proceedings in respect of the above two notices. The present impugned order has been passed in continuation of the order of 1996 and by this order the Commissioner has inter alia held that the show cause notices issued during the pendency of provisional assessment are maintainable, and ordered that the notional interest at the rate of 12% per annum should be adopted for working out the differential duty in both the show cause notices and arrived at a duty demand of Rs. 2,52,72,932/- but decided the issue on merits in favour of the assessees by applying the ratio of the Apex Court's judgment in VST Industries Ltd. v. CCE, Hyderabad reported in 1998 (97) E.L.T. 395 (SC). Hence this appeal by the Revenue. 4.We have heard both sides. 5.It is an admitted position that the assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereunder, the date of adjustment of duty after the final assessment thereof. After final assessment, a copy of the order on the return filed by the assessee has to be sent to him. Duty has to be paid by the assessee on the basis of the final assessment within ten days' time from the receipt of the return. No question of giving any notice under Section 11-A arises in such a case. It is only when even after final assessment and payment of duties, it is found that there has been a short-levy or non-levy of duty, the Excise Officer is empowered to take proceedings under Section 11-A within the period of limitation after issuing a show-cause notice. In such a case, limitation period will run from the date of the final assessment. The scope of Section 11-A and Rule 173-I are quite different. In this case, the provisional assessment earlier made by the proper officer has been quashed and pursuant to the direction of the High Court, the proper officer has made the final assessment. No question of failure of issuance of show-cause notice under Section 11-A arises in this case. Even otherwise, we do not find any infirmity in the order of the Tribunal'. 7.It is significant to note tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. However, it is settled by a long catena of decisions that to be entitled to file an appeal the person must be one aggrieved by the decree. Unless a person is prejudicially or adversely affected by the decree he is not entitled to file an appeal (See Phoolchand and Anr. v. Gopal Lal - Smt. Jatan Kanwar Golcha v. Golcha Properties (P) Ltd. -; Smt. Ganga Bai v. Vijay Kumar and Ors. No appeal lies against a mere finding." "9.Any respondent though he may not have fled an appeal from any part of the decree may still support the decree to the extent to which it is already in his favour by laying challenge to a finding recorded in the impugned judgment against him. Where a plaintiff seeks a decree against the defendant on grounds (A) and (B), any one of the two grounds being enough to entitle the plaintiff to a decree and the Court has passed a decree on ground (A) deciding it for the plaintiff while ground (B) has been decided against the plaintiff in an appeal preferred by the defendant, in spite of the finding on ground (A) being reversed the plaintiff as a respondent can still seek to support the decree by challenging finding on ground (B) and persuade the appellate court to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessees to agitate the issue of maintainability of the show cause notices and challenge in success in the light of the Apex Court's decision in CCE v. ITC Ors. Following the ratio of the ITC judgment, we hold that the show cause notices issued to the respondents under Section 11A of the Central Excise Act are without jurisdiction as they were issued when the assessments were provisional. 9.On merits, the judgment of the Apex Court in VST Industries - 1998 (97) E.L.T. 395 (SC) squarely covers the present case. In the impugned order, the Commissioner has extensively dealt with the above decision in the case of respondent's competitor who also sells cigarettes and who had introduced a similar scheme offering an interest-free security deposit to wholesale dealers who were given choice to opt for the security deposit scheme in the same manner as in the present case. The Apex Court relied upon the fact that the scheme was optional and the goods were sold at the same price to wholesale dealers who did not furnish any security deposit and those wholesale dealers who opted for the security deposit scheme. The sale price to wholesale dealers who did not give any security deposit, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay Tyre International Ltd. - 1983 (14) E.L.T. 1896 (S.C.). 11.In the present case, Section 4(1)(b) is clearly inapplicable as the price under Section 4(1)(a) is available. This aspect has been dealt with in the impugned order in paragraph 9.5, with reference to the decision of the Apex Court in Indian Oxygen - 1988 (36) E.L.T. 730 (S.C.). With regard to the price at which cigarettes were sold to those wholesale dealers who did not participate in the security deposit scheme, there is no material on record to establish that additional consideration was received directly or indirectly by the assessee from such wholesale dealers and therefore the question of adding any additional consideration does not arise. 12.The decisions in the case of CCE v. Hero Honda Motors Ltd. - 2005 (183) E.L.T. 120 (S.C.), Metal Box India Ltd. v. CCE - 1995 (75) E.L.T. 449 (S.C.) and CCE v. Rural Engineering Company Pvt. Ltd. - 2005 (184) E.L.T. 135 (S.C.), relied upon by the Revenue, are clearly distinguishable. In the case of Metal Box India Ltd. there was a substantially lower price for sale by Metal Box to Ponds on account of heavy advance by Ponds to Metal Box, from whom the price was reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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