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TMI Blog2014 (7) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... s a well settled law that provisional assessments are provisional for all purposes. Once, the basis of wholesale price declared in the pricelists have been challenged in the show cause notice, there would be no bar to finalize the RT 12 assessment in accordance with the revised pricelists. We reject the contention of the appellant. We hold that the Commissioner has correctly ordered to finalize all the pricelists including the revision of prices in pricelists approved earlier which results in confirmation of the entire demand for the period 30-12-1983 to 28-2-1986. Deduction on account of surcharge on the additional sales tax on the revised prices - if prices are revised as per (i), is to be allowed for arriving at the assessable value for calculation of duty - Held that:- The appellants are not contending that they have paid the surcharge on the additional sales tax. Although, the appellants have already deposited an amount of ₹ 6,96,30,974/- as Central Excise duty, they have not produced any evidence regarding payment of surcharge on additional sales tax for the period 30-12-1983 to 28-12-1986. Therefore, the benefit of deduction on this count from the assessable value c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id goods, the price lists could not approved finally. The Superintendent provisionally assessed the RT-12 returns in respect of duty paid by the assessee on the goods cleared during the period from 8-4-1985 to 28-2-1986. 3.2 In January, 1986, the Central Excise Officers undertook a study which revealed that there was abnormal difference between the actual wholesale prices realized and wholesale price declared by the appellants in the pricelists. Thereafter, various offices and premises of the appellants and office premises of some of their wholesale authorized dealers were searched on 15-1-1986, 17-1-1986, 21-1-1986, 4-2-1986, 11-2-1986 and various documents and records were seized. As a result of investigations, two show cause cum demand notices bearing Nos. V.Adj(30)29A/86/Voltas, dated 23-4-1986 and No. V.Adj(SCN) (29A)15-772/86/B.III, dated 24-7-1986 were issued for demand of differential duty of ₹ 7,75,12,588.00 on the said goods for the combined period from 30-12-1983 to 28-2-1986 and for imposition of penalty under Rule 173Q of the said Rules. Likewise, show cause notices were also issued to the Board of Directors and other office bearers of the appellant for penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and on 27-11-1991 granted stay to the adjudication proceedings in the show cause notice dated 31-3-1989 stating that as the provisional assessment ordered under Rule 9B of the said Rules was pending finalization, as such no show cause notice can be issued under Section 11A of the Act for recovery of duty. 3.4 The Department filed the special leave petition No. 15370 of 1992 in the Hon ble Supreme Court against the order dated 27-11-1991 passed by the Hon ble Bombay High Court. Counsel for the Department accepted that the assessment of duty during the said period was provisional and requested the Hon ble Court that the notice dated 31-3-1989 may be treated as notice for finalization of provisional assessment. The Hon ble Supreme Court while disposing of this special leave petition on 1-3-1993 ordered that - It would be open to the assessing authority to rely upon the material already indicated in the show cause notice dated 31-3-1989 or any further material, as it may think necessary subject however to the respondent assessee being afforded an opportunity to meet the case put against it. 4. In view of direction given by Hon ble Supreme Court and Hon ble Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y from May, 1984. And for the said sale, the appellants raised sales invoices at the same price as charged to M/s. Sah Sanghi, Thane i.e., the wholesale prices of the said goods declared with the Department. However, the difference between normal wholesale prices applicable to Thane and upcountry Maharashtra wholesale dealers and sale prices billed in the sales invoices was recovered from these dealers under guise of technical service fees by raising debit notes on monthly basis. (d) Wholesale prices of the goods declared by the appellants in their price lists filed from time to time during the said period, were much lower than the manufacturing and selling cost of the goods declared in the cost Audit report for the year 1982-83. (e) Wholesale prices of the said goods applicable to all Thane and upcountry Maharashtra dealers irrespective of mode of delivery of goods i.e. delivery either from Thane factory or Bombay sales depot, were in fact much higher than the wholesale prices of the said goods declared by the assessee in the price lists filed under Rule 173C of the Central Excise Rules for the determination of assessable value. (f) The charges recovered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant submitted before the Commissioner (Appeals) that differential duty, if worked out on the basis of Supreme Court judgment in the case of Madras Rubber Factory Ltd. reported in 1995 (77) E.L.T. 433 (S.C.), would work out to ₹ 6.96 crores. Commissioner (Appeals) vide order dated 22-1-2001, having enforced pre-deposit of ₹ 6.96 crores, remanded the case to the Assistant Commissioner to re-determine the assessable value on the basis of MRF Judgment. The Assistant Commissioner vide order No. 22/Wagle/II/2005, dated 28-5-2007 confirmed the demand of ₹ 7,16,20,605/-. The appellant again went before Commissioner (Appeals) on the ground of natural justice. Commissioner (Appeals) vide order dated 26-12-2005 remanded the matter for passing speaking order on merits. In de novo proceedings the Assistant Commissioner vide order No. 23/W/II/2005, dated 19-2-2007, after allowing cross-examination of witnesses passed a speaking order confirming the demand of ₹ 7,07,46,948/-. In this order the Assistant Commissioner observed that advertisement expenses are not to be added to the assessable value. The said order was this time challenged both by the appellant as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) were approved provisionally. Even though the RT-12 returns were assessed provisionally for the entire period covering all the 14 pricelists, no show cause notice was issued to modify the 4 pricelists approved finally. They relied on judgments in the case of Siemens India v. CCE - 1986 (25) E.L.T. 821 (T) and in the case of Buckau Wolf India v. CCE - 1994 [(69) E.L.T. 423 (T)] to state that finalization of assessment under erstwhile Rule 173I of the erstwhile Central Excise Rules is required to be carried out on the basis of approved assessable values only set out in pricelists approved in Rule 173C. And that the proceedings under Rule 173I are limited and cannot be extended to reopen already approved pricelists. Therefore, recovery amounting to ₹ 3,45,77,174.97 pertaining to the 4 pricelists approved finally is not sustainable. As regards advertisement charges of ₹ 50/- per unit, it was contended in written submissions that these cannot be included in the assessable value as the advertisement scheme was never implemented and no dealer made payment to M/s. Voltas and neither were the advertisement charges included in the cum-duty price. However, during arguments the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order. At the outset, the ld. AR drew our attention to the fact that, after approval of the initial 4 pricelists, the department stopped giving final approval to the subsequent pricelist because the appellant did not submit any invoices of the sale of the air conditioners. Therefore, the RT-12 assessment for the entire period including the period for which the pricelists were approved finally, was made provisional by a specific endorsement in the memorandum of assessment in the RT-12. He also stressed the background of the case starting from the recovery of voluminous documents during search seizure operations. As regards the technical service charges he stated that these were compulsorily recovered in respect of all sales and had nothing to do with any post sales activity. These were recovered by raising debit notes which fact was not disclosed to the department. 8.2 Ld. Commissioner (AR) said that the company declared assessable value on the basis of price charged from favour buyer in respect of their entire seals, even though only very small quantity was sold to the favoured buyer. In his written submissions, he relied upon many documents to prove that collection for techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to CESTAT judgment in the case of IJM Gayatri Joint Venture v. Commissioner of Cus. C. Ex., Hyderabad - 2008 (231) E.L.T. 683 (Tri. - Bang.) in which it has been held that assessments which are provisional for a particular reason, will be provisional for all purposes. He also referred to the case of A.G. Incorporation v. Commissioner of Customs, Delhi reported in 2013 (287) E.L.T. 357 (Tri. - Del.) to say that show cause notice can be issued even in the case of classification list already approved if there is suppression. 9. We have carefully considered the submissions of both sides and have also gone through their written submissions. After numerous orders in litigation at various appellate levels in the past 28 years, the issues that remain to be decided now are (i) Whether the technical service fee should be added to the price declared in the pricelists and consequently be included in the assessable value for assessment purposes. (ii) Whether the demand pertaining to 4 pricelists effective for the period 30-12-1983 to 7-4-1985 is sustainable. (iii) Whether deduction on account of surcharge on the additional sales tax on the revised prices, if prices a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant segregated the same and recovered the charges separately by raising debit notes under invoices without providing any corresponding service. 10.1 The voluminous documents some of which are referred to in Revenue s submission is para 8 above do point to the fact that the miniscule sale to M/s. Sah Sanghi was just a ruse to avoid declaring the correct wholesale price in the pricelists. We have also seen statements recorded of dealers such as M/s. Greenwhich Radio Corporation (document B-18 page 191 Volume-IV and document B-22 page 227), M/s. Car Mart Pvt. Ltd. (document B-17 page 188) who admitted that even if they were permitted to take delivery from Thane factory, they would pay as per depot prices and no special rate for taking delivery at the factory gate was given to them. In another statement of M/s. Parikh Engineering Corporation (Annexure B -18, Page 191 Volume-V) reveals that the purchase price is split into two parts, one part being the net price of air conditioner and the other part by raising debit note. The cost audit report for the year 1982-83 which is furnished to Company Law Board shows that the ex-party price declared was less than that shown in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Column (7) of Annexure X should not be considered as correct value, why the provisional assessments of duty for the period 30-12-1983 to 28-2-1986 should not be finalized on the basis of assessable value shown in Annexure X . We have seen Annexure Z which is part of the show cause notice. This Annexure gives in respect of 14 pricelists under consideration, the details such as pricelists number, date, period in which effective and whether approved finally or pending for approval. Further Annexure X gives the details of declared value, proposed additions to declared values and differential duty demand for the entire period 30-12-1983 to 28-2-1986. A reading of these two Annexures shows that the appellants argument is fallacious. When the Annexure Z clearly mentions the pricelists which were already approved and Annexure X gives details of values from 30-12-1983 and the show cause notice dated 28-10-1994 clearly states that why the provisional assessments for the period 30-12-1983 to 28-2-1986 should not be finally assessed on basis of revised wholesale prices, no other conclusion can be drawn except that the approved pricelists are also sought to be revised by issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that the show cause notice issued to the appellants by Assistant Commissioner was a comprehensive one which sought to revise the pricelists and thereafter only the RT-12 assessments would be finalized under Rule 173I. It is a well settled law that provisional assessments are provisional for all purposes. Once, the basis of wholesale price declared in the pricelists have been challenged in the show cause notice, there would be no bar to finalize the RT 12 assessment in accordance with the revised pricelists. We reject the contention of the appellant. We hold that the Commissioner has correctly ordered to finalize all the pricelists including the revision of prices in pricelists approved earlier which results in confirmation of the entire demand for the period 30-12-1983 to 28-2-1986. 10.5 The last issue is that the appellant has sought deduction of the additional sales tax surcharge on the revised prices as against the prices declared by them. The Commissioner in his adjudication order has relied on the Supreme Court case of Akay Cosmetics Pvt. Ltd. [2005 (182) E.L.T. 294], which held that : 41. In the case of Commissioner of Customs Excise, Bangalore v. M/s. Sujata Tex ..... 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