Customs, Excise and Gold Tribunal - Delhi
Indian Regrigeration Industries vs C.C.E., New Delhi on 25 May, 2001
ORDER
K. K. Bhatia:
1. The appellants manufacture refrigerating and air conditioning machinery, appliances and parts thereof falling under Tariff item 29A of the then existing Central Excise Tariff. They filed classification list effective from 1.4.78 in respect of the goods manufactured by them. In this classification list, they claimed exemption under Notification No.71/78 dated 1.6.78. They declared that the value of the goods falling under item 29A during the year 1977-78 was Rs.42,03,147.46 (Rs.4,59,185.50 dutiable goods plus Rs.37,43,961.96 exempted goods). This classification list was approved on 17.12.79, rejecting the claim of the appellants for exemption under notification No.71/78.
2. Immediately afterwords the appellants received a letter dated 26.12.79 from the Superintendent, Central Excise, demanding duty of Rs.5,91,400./- being the duty due from them as a result of finalisation of RT-12 returns.
3. The party filed an appeal against the above communications dated 17.12.79 and dated 26.12.79, before the Collector of Central Excise (Appeals) and the appellate authority vide order dated 3.3.80 remanded the matter to the Assistant Collector for de-novo adjudication.
4. The Assistant Collector thereafter issue a show cause notice dated 4.3.80 to the appellants calling upon them to show cause why the exemption claimed by them under Notification No.71/78 and disallowed earlier vide his letter dated 17.12.79 should not be confirmed.
5. On considering the submissions made by the noticee-party in their written reply and those made during the course of personal hearing, the Assistant Collector of Central Excise vide his order dated 24.4.80 held that the exemption under notification No.71/78 was not available to them during the financial year 1978-79 since the clearance of the specified goods effected by them during the previous year had exceeded Rs.17.75 lacs and consequently, confirmed the earlier order dated 17.12.79 passed by his predecessor.
6. Thereafter, it appears from the documents on records that the appellants filed a writ petition in the Delhi High Court against the above orders of the Assistant Collector which stood finally dismissed by the order dated 3.5.1993 of the Hon'ble Court with the observation that the petition was premature. By this order, the petitioners were given the liberty to file an appeal before the Collector (Appeals) within six weeks. Accordingly, the appellants filed appeals and the same were rejected by the Collector (Appeals) vide Order dated 12.10.1993. Hence, the present appeals.
7. We have heard Shri R. Swaminathan, Consultant for the appellants and Shri Sheo Narain Singh, SDR for the respondent. The learned consultant for the appellants very fairly submitted that he is not contesting the appeals of his client on merits in view of the Supreme Court judgment in Union of India Vs. Nandi Printers - 2001(127) ELT-645(SC). He, however, contended that the demand in this case is barred by limitation. He argued that the classification list was filed by the appellants on 1.4.78 before effecting clearance in April, 1978. It is stated that the Assistant Collector did not order for provisional assessment and the demand is sustainable only when the assessments during the period are considedred to be provisional. It is also contended that demand does not take into account the element of excise duty for the purpose of reworking out duty assessible value as per the provisions of Section 4(4)(d)(ii) of the Central Excise Act, 1944. The learned consultant has relied on the following decisions in support of his submissions:-
1. Casmic Dye Chemicals Vs. CCE.
1995(75)ELT-721(SC).
2. Pushpam Pharmaceuticals Co. Ltd. Vs. CCE.
1995(78) ELT-401.
3. Samrat International Pvt. Ltd., Vs. CCE.
1992(58) ELT-561(SC).
4. Coastal Gases Pvt. Ltd., Vs. CCE.
1997(97) ELT-460(SC).
2000(118) ELT-627(T-LB).
6. Srichakrs Tyre Ltd. Vs. CCE., Madras.1999(108) ELT-361(T).
8. Shri Sheo Narain Singh, SDR appearing for the Revenue reiterated the findings arrived at by the Collector (Appeals) in his order.
9. We have considered the submissions made before us by both the sides. As already stated, the appellants are not contesting these appeals on the merits of their case. In other words, they are conceding that they were not entitled to the exemption under Notification No.71/78 during the period 1978-79. On this score, therefore, we uphold the orders passed by the lower authorities as uncontested. As regards the contention of time bar of demand, admittedly, the classification list filed by the appellants with effect from 1.4.78 was approved by the Assistant Collector on 17.12.79 in which he disallowed the exemption under Notification No.71/78 claimed by them in their classification list and they were further asked by the Superintendent of Central Excise vide his letter dated 26.12.79 to deposit duty of Rs.5,91,400.53 for the clearances made during 1978-79 as per RT-12 statement. Along with this letter, the Superintendent of Central Excise also returned a copy of finalised RT-12 returns for each of the months of this period. The party filed appeal against these orders/communications and the matter was remanded to the Assistant Collector by the Commissioner (Appeals) for de-novo consideration. At this stage, the Assistant Collector issued a show cause notice dated 4.3.80 to the party. Accordingly, the classification list dated 1.4.78 was approved on 17.12.79. The larger Bench of the Tribunal in Rajiv Mardia Vs. CCE., Indore - 2001(129) ELT-334(T-LB) on due consideration of the rulings given by the Apex Court in their judgments in Samrat International and Coastal Gases (Supra) have held as follows:-
"6. From the above discussion, we are clear in our mind that Samrat International Pvt. Ltd. envisages payment of duty on provisional basis pending decision of classification list or price list. For these payments to be treated as provisional, procedure contemplated by Rule 9B is not to be followed. Therefore, we are of the considered view that the observation made by the Larger Bench of five Members that there should be material on record to show that procedure laid down in Rule 9B was followed for the purpose of showing that the assessments are provisional, cannot hold good in the case of payments of duty effected pending finalisation of classification list or price list. Subject to this clarification, we agree with the observations and findings arrived at by the said Bench in Misc. Order No.47/2000-A."
10. Consequently, the assessments from 1.4.78 till 17.12.79-the date on which classification list was approved-remained provisional. The show cause notice for these assessments admittedly is issued on 4.3.80, on remand of the matter by the Collector (Appeals) to the Assistant Collector. If these be the facts, the show cause notice dated 4.3.80 is within a period of six months of 17.12.79 as stipulated under Section 11A of the Central Excise Act, 1944. The demand in this case, therefore, is not time barred and plea of the appellants in this regard is rejected, upholding the findings of the lower appellate authority on this score.
11. This leaves us with the contention relating to reworking out of the assessable value under Section 4(4)(d)(ii) of the Act. In this regard, it is observed that in the chequered history of over 16 years of the proceedings till they reached the stage of appeal before the Tribunal, it has never been the case of the appellants that the aggregate value of goods cleared by them on payment of duty for the purpose of computation under notification No.71/78 included duty element also. Even in the written Synopsis submitted by the learned Consultant of the appellants at the time of hearing before this Bench, it is stated, "3.1. Explanation III to the Notification indicated the method by which value of clearances under this notification was to be calculated. The Explanation identified certain specified goods whose value of clearances was not to be taken into account." It is also stated in this that during the financial year 1977-78, the value of excisable goods cleared by them or on their behalf for home consumption from one or more factories was Rs.4,59,185.50 and it is further certified that duty exempted goods declared non-excisable were cleared to the tune of Rs.37,43,961.96 only during the financial year 1977-78. Obviously, while computing the value of excisable goods for the purpose of availing exemption under Notification No.71/78, the appellants have not taken into account the element of duty paid on these goods. The departmental authorities have also adopted the same method for the demand of payment of duty and, therefore, no fault can be found with it. Moreover, the appellants did not raise this point before the original authority or before the lower appellate authority even when the appeals were filed before him in terms of the direction of the Hon'ble High Court. In view of these facts, therefore, this contention of the appellants appears to us only an after-thought and if entertained at this stage of the appeal, it would call for remand of the matter to the original authority for verification of the facts, to which we are not inclined to agree.
12. The appeals are dismissed.