Customs, Excise and Gold Tribunal - Bangalore
Paro Foods Products vs Commissioner Of Central Excise on 11 July, 2003
Equivalent citations: 2003(90)ECC182, 2003(160)ELT923(TRI-BANG)
ORDER
S.S. Sekhon
1. The appellants are engaged in the manufacture of biscuits as job workers and were filing price-lists under Part VII. A Show-cause notice was issued dated 13.3.89 proposing to disallow certain deductions with respect to five price-lists filed during May 1988 to February 1989. Similarly, another show-cause notice dated 25.8.89 was issued for the price-lists filed during April 89 to May 89. The Assistant Collector decided these two notices vide his order dated 1.2.1990 dropping the proceedings initiated and permitting the deductions as claimed. On 1.2.90. department filed an appeal and vide order dated 25.11.91, the Collector (Appeals) remanded the matter for de-nova determination of the values in line with the decision of the Supreme Court in the case of Ujagar Prints. In the de novo proceedings order dated 5.8.92, was issued by the Assistant Commissioner directing the appellants to file a price-list based on cost of raw-material. Job work charges, manufacturing expenses as required by the decision of the Apex Court in the case of Ujagar Prints. In the mean time, price-lists for the period 1.4.88 to 31.3.89 were approved on the basis of Order-in-Original dated 1.2.90 on various dated from 23.3.90 to 28.3.90 and no appeals against these approvals were filed by the Department. However, on 5.2.93, the Assistant Commissioner based on the remand proceedings order issued a letter advising the appellants to file a revised price-list for the period 13.9.90 to 1.3.92 and the said letter reads as follows:
"OFFICE OF THE ASSISTANT COLLECTOR OF CENTRAL EXCISE HYDERABAD II DIVISION, HYDERABAD C.NO.IV/16/SRP/235/89VC-I Dt. 5.2.93 To M/s. Paro Food Products, Mir Alam Tank Road, Hyderabad.
Gentlemen, Sub:- Central Excise -- Provisional assessment of R.T. 12s in respect of M/s. Paro Food Products -- ref.
With reference to the price list filed since 13.8.90 onwards till 1.3.92 where you have endorsed that they are under protest and were on the basis of Collector (Appeals) Order No. 102/87. These price lists were rejected by issue of a show cause notice and the matter was adjudicated on 5.8.92. You were advised to file revised price lists as per the order adjudicated by the undersigned. But you have not filed the price lists till date (though 6 months lapsed) since the date of adjudication i.e. 5.8.92. The assessments are made provisionally under Rule 9-B since the revised price lists based on the price lists submitted by you are not available with us therefore Z Bonds and Bank guarantee are not insisted right now."
Yours faithfully Sd/-
(N.K.P. Prasada) Assistant Collector Copy to the Superintendent of Central Excise SRP-I Range You are directed to undertake provisional assessments of the R.T. 12s pertaining to the period in question i.e. from October 1990 and direct the assessee to file revised price lists within 10 days of receipt of this letter.
Sd/-
(N.K.P. Prasada) Assistant Collector"
2. The appellants filed revised documents. However they were issued another notice dated 7.2.97 by the Assistant Commissioner holding that on finalisation of the provisional assessment for the valuation of biscuits for the period April 96 to March 98 there was a differential duty of Rs. 1,01,01,940 which was demanded without giving any opportunity to the appellants about the finalisation of the price-lists. A reply was filed to this notice contesting inter-alia that the assessments for the period could not be considered provisional under Rule 9B.1
3. The Assistant Commissioner passed an order dated 11.8.97. Vide the abovesaid order, a demand of Rs. 48,46,178 for the period Nov. 93 to March 96 was dropped on the ground that during that period no orders of provisional assessments under Rule 9B were passed. Demand of Rs. 15,46,773 was dropped for the period 1.4.90 to 12.9.90 was dropped on the ground that the price-lists were already approved by the Assistant Commissioner. Demands for the period 1.4.88 to 1.3.89 and 13.9.90 to 21.11.92 amounting to Rs. 37,08,989 was confirmed under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of Central Excise Act, 1944 after observing that this was a case of finalisation of revised price-lists/provisional assessments and therefore, there was no justification for imposing any penalty on the assessee.
4. Aggrieved by this confirmation of Rs. 37,08,989 an appeal was filed to Commissioner (Appeals) pleading that vide CBEC Circular dated 24.4.89, if price-lists filed under Rule 173 were to be kept provisional a specific order in that regard was to be passed by the proper officer and in this case no such orders were passed. It was also submitted that this was the requirement as per Rule 173-(C). The Commissioner (Appeals) dismissed the appeal and confirmed the demands as raised after relying on the decision of the Apex Court in the case of Samrat International Ltd., and of the Larger Bench in the case of Rajiv Mardia, 2001 -(75) ECC 221 (LB) : 2001 (129) ELT 334 and held that the assessments in this case cannot be considered as final and therefore, duties as demanded were required to be paid and upheld the order of the Assistant Commissioner. Hence this appeal.
5. After hearing both sides and considering the material on record it is found
(a) The short-point that arises in this case is whether the assessments during the subject period were provisional or final and if they were not provisional, the demands could not have been effected. It is found that the Apex Court in the case of Metal Forgings & Anr., 2002 (84) ECC 705 (SC) : 2002 (53) RLT 507 after expanding the Apex Court decision in the case of Samrat International (P) Ltd., 1991 (31) ECC 207 (SC) : 1992 (58) ELT 561 (SC) held in para 13 of the reported decision.
"......... A perusal of this judgment shows that the said judgment was delivered on the peculiar facts of that case and it does lay down a principle in law which enable the revenue to treat every classification made by it or the goods removed by virtue of said classification to be treated as the provisional merely because some appeal or to her proceeding is pending, questioning the classification involved therein. As a matter of fact, this Court in the case of Coastal Cases & Chemicals Pvt Lid., v. Asstt. CCE, Visakhapatnam (supra) while considering the judgments in Samrat International case (supra) held thus....."
and thereafter in para 14, held as follows:
"From the above, it is clear that to establish that the clearances were made on a provisional basis, there should be first of all an order under Rule 9B of the Rules and then material to show that the goods were cleared on the basis of said provisional basis and payment of duty was also made on the basis of said provisional classification. These facts in the instant case are missing, therefore, in our opinion there is no material in the instant case to establish the fact that either there was a provisional classification or there was an order made under Rule 9B empowering the clearance on the basis of such provisional classification. In the absence of the same, we cannot accept the argument of the revenue that in fact the order of the Assistant Collector dated 21.1.1976 is a provisional order based on which clearance was made by the appellants or that they paid duty on that basis. On the contrary, as held by the Judicial Member the said order of classification was a final order, therefore, the Revenue cannot contend the limitation prescribed under Section 11A does not apply."
Applying the tests of the Hon'ble Apex Court, as laid down in para 14, extracted herein above, it is essential to find out in this case whether there was an order under Rule 9B and whether there was a provisional approval of price-lists in this case. The learned DR for the Department submitted a letter No. C.No. V/19/17/61/95-Val (PF) dated 22.5.03 where in the Commissioner has agreed that for the period 1.4.1988 to 31.3.89, the assessments are not provisional and for the period from 13.9.90 to 21.11.92, the position has been explained as below:
(a) "RT-12s were provisionally assessed.
(b) Xerox copies of Approved Price Lists for the relevant period are enclosed. Assistant Commissioner has approved the price lists with the following conditions.
(1) Subject to verification of Sales invoices & accounts.
(2) Trade discounts allowed subject to production of proof at the time of finalisation of assessments.
(c) Orders for Provisional assessment vide Assistant Commissioner's letter C.No. IV/16/SRP/235/89-VC-I dated 18.2.1993 under CER, 1944 from 13.9.90."
when specifically asked to point out the order of provisional assessment under Rule 9B, he relied upon letter dated 5.2.93 extracted in extensio in para 1 above, directing the Central Excise Superintendent to keep the assessments pertaining to the period from October 90 provisional, as the order under Rule 9B. A perusal of this letter, when read with the admitted position that the Price Lists to be assessed for the relevant period have been approved by the Assistant Commissioner, as per the report of the Commissioner produced by SDR, it is apparent that there is no pending list for approval, as also the order dated 5.2.93, relied by Revenue, cannot be construed as an order on which the goods were to be cleared on provisional basis. Since the provisional clearances, effected as per this order, would be only prospective and not covered the clearance prior to the date of issue of the said order. The endorsement in the said order dt. 5.2.93 is to keep the RT 12 assessments for the month of October 90 to be made as provisional would be for goods already cleared and not to be cleared. It is therefore, not considered to be an order under Rule 9B. The Revenue has also not enclosed any copy of a Bond, to be executed, as required under the provisions of the said Rule 9-B, which would have been executed by the assessee and was a requirement under the said Rule. The price lists for this period are said to have been approved as per the Commissioner's clarifications submitted by the DR. Therefore, we cannot uphold the assessments during the concerned period to be provisional as per the tests prescribed by the Apex Court.
(b) The reliance of the Ld. Commissioner (Appeals) on the Larger Bench decision in the case of Rajiv Mardia, 2000 (70) ECC 128 (LB) : 2000 (118) ELT 627 (T) cannot be supported, in view of the Apex Court finding in the case of Metal Forging & Anr., 2002 (84) ECC 705 (SC) : 2002 (53) RLT 507.
(c) In view of the findings the demands as determined cannot be upheld.
In view of our findings, the orders of the lower authorities are set aside and appeals allowed with consequential relief as per law.