9911796707
TMI Blog1990 (12) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies Act, 1913 and carries on business of manufacture of motor vehicles at its factory at Pimpri, Pune Dist. The petitioners manufacture chassis of motor vehicles. The motor vehicles are excisable goods subject to duty of excise under Tariff Item No. 34 of the First Schedule to the Act. Explanation I to Tariff Item No. 34 provides that expressions "motor vehicle", "tractor" including "agricultural tractor" and "trailer" shall include a chassis. The petitioners opted for selfremoval procedure under Chapter VII-A of the Act after the Central Government declared by notification that the said procedure would apply to excisable goods manufactured by the petitioners. Rule 173A of the Central Excise Rules, 1944 provides that the provisions of Chapter VII-A would apply to excisable goods as are notified by the Central Government. Rule 173B provides that every assessee shall file with the proper officer for approval a classification list inter alia setting out the value and description of all goods produced or manufactured. The proper officer, after scrutiny, approves the list. Rule 173C then provides that every assessee shall file with the proper officer a price list showing the prices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erintendent of Central Excise served show cause notice dated February 20, 1985 on the company claiming that the assessee has short-paid duty of Rs. 29,95,769.55 for the period from August 1, 1984 to November 30, 1984, because of not taking into consideration the value of motor vehicle chassis according to the given specification in the classification list i.e. with six tyres but instead the value was assessed by taking into consideration the value of motor vehicle chassis with four tyres only and, consequently, the assessee is liable to pay duty on differential value in accordance with the annexure to the show cause notice. The Superintendent also served five more notices in respect of period commencing from January 1, 1980 and ending with March 31, 1981 on identical grounds. The petitioner company was called upon to show cause to the Collector of Central Excise, Pune, and in support of the claim of the department, reference was made to the copy of letter dated February 1,1985 from the Automotive Research Association of India. The said letter claims that the Association has studied the specification of Tata vehicle and confirm that six tyres are required to be fitted to meet the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om examining whether the assessable value of motor vehicle chassis should be loaded with the value of two more tyres. The learned counsel urged that exercise of jurisdiction under Article 226 of the Constitution at this juncture is uncalled for. On merits, Mr. Desai did not dispute that motor vehicle chassis were cleared from factory gate by fitment of four tyres only and the company had paid duty by assessing the value of the chassis along with the value of four tyres. It is not the claim of the department that the company is manufacturing tyres. Mr. Desai referred to the return filed by Pratap Wankhedkar, Assistant Collector of Central Excise, Pune, and sworn on August 28, 1985, to urge that the claim of the department that the assessable value of motor vehicle chassis must be determined with reference to what has been given under the column of specification in the classification list. Mr. Desai very frankly did not support the issuance of show cause notices other than one issued on February 20, 1985 for the period commencing between August 1, 1983 and November 30, 1984. 6. Before adverting to the validity of the show cause notice dated February 20, 1985, which is admittedly wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons that if the show cause notice is issued without any jurisdiction or the show cause notice cannot be sustained by reference to any of the provisions of law, then the High Court is entitled to strike down the show cause notice and it is not necessary to compel the assessee to undergo cycle of litigation before the Excise authorities. It would be appropriate, in this connection, to make reference to decision of the Supreme Court in Calcutta Discount Co. v. I.T. Officer (AIR 1961 SC 372). While examining the provisions of Section 34 of the Income-tax Act, 1922, the Supreme Court observed that to confer jurisdiction under Section 34 to issue notice in respect of assessments beyond the period of four years from the end of the relevant year, the Income-tax Officer must have reason to believe that income, profits or gains chargeable to income-tax have been under assessed and he must have also reason to believe that such under assessment has occurred by reason of omission or failure on the part of an assessee to disclose fully and truly all material facts. The Supreme Court then observed that if the fact does not disclose the existence of the relevant requirements, then it must be concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with four tyres, merely because the specification in the classification list refers to six tyres, the assessable value is required to be loaded with the value of two more tyres. On the undisputed facts that the company had cleared chassis only with four tyres, the question for determination is whether the department can claim that the assessable value of the chassis should be loaded with the value of two more tyres. In our judgment, the claim of the department in this connection, is totally unsustainable. Mr. Andharujina pointed out that several customers while purchasing the chassis request that the chassis should be supplied with four tyres and not six. The learned counsel invited our attention to copy of the letter sent by one of the customers and which is annexed as exhibit 'K' to the petition. It is not in dispute that indeed the company had cleared the chassis with four tyres. Is it now permissible for the department to claim that though goods cleared from the factory gate are motor vehicle chassis with four tyres, still the assessable value should be determined by taking into consideration the value of six tyres instead of four tyres ? In our judgment, the department cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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