Customs, Excise and Gold Tribunal - Delhi
Crompton Greaves Ltd. vs Cce on 19 July, 1993
Equivalent citations: 1993(49)ECR255(TRI.-DELHI)
ORDER P.K. Kapoor, Member (T)
1. These appeals arise out of the order dated 16.10.1990 passed by the Collector of Central Excise, Bombay-II. Briefly stated the facts of the case are that the appellants were engaged in the manufacture of electrical stampings, laminations under the erstwhile Tariff Item 28A which were used by them captively in the manufacture of motor and fans. Since their requirements of stampings and lamination were more than their own production, they were also purchasing such goods from GKW, Devidayal Prabha Engineering and other manufacturers. Since the capacities of other suppliers were limited, the appellants were acquiring the bulk of their excess requirements of stampings and lamination from M/s. G.K.W. In respect of the stampings and laminations manufactured by them for captive consumption the appellants filed price lists under the provisions of Rules 6b(ii) of the Central Excise (Valuation) Rules, 1975 in Part-VI-B in which the value was arrived at on the basis of the manufacturing cost plus profit as certified by the Accountant. In another list filed under the provisions of Rule 6b(i) of the Central Excise (Valuation) Rules, 1975 they declared the price of comparable goods as 'Nil/Not applicable'. The price lists filed by the appellants from time to time under the provisions of Rule 173C of the Central Excise Rules, 1944 were approved by the department.
2. The appellants were served with a show cause notice dated 16.8.1983 requiring them to show cause as to why the price lists filed by them in proforma VI(B) should not be rejected and for the purpose of assessable value of the said goods the purchase price of comparable goods of M/s. G.K.W. should not form the basis for assessment. The appellants contended that the method for valuation of the goods proposed to be adopted by the department was totally inconsistent with the provisions of the law since the goods manufactured and captively consumed by them and the goods manufactured by M/s. GKW could not be deemed as 'comparable goods' on account of several factors such as technologies employed, volumes of production and overheads being different in the two cases. However, by his order dated 10.1.1984 the Assistant Collector held that for the purpose of assessment of the said goods captively consumed by the appellants, the price of comparable goods of M/s. GKW would form the basis of assessment and directed the appellants to file price lists in proforma VI(A).
3. During the pendency of the proceedings initiated by the show cause notice dated 16.8.1983 the department issued various other show cause notices/demands as under:
___________________________________________________________________________ Sl. No. Show cause notice No. and date Amount Period ___________________________________________________________________________
1. C. EX/GL(P)/SCN/03/1270 dated 29.9.1983 2,90,116-30 1.10.1975 to 30.6.1980
2. C. EX/CE/CGL/P/SCN/03/791 dated 39,31,990-13 1.7.1980 to
4.6.1983 28.2.1983
3. C. EX/CGL/P/SCN/03/1069 dated 17.8.1983 4,51,682-26 1.3.1983 to 31.7.1983
4. C. EX/CGL/P/SCN/83/226 dated 2.3.1984 5,67,396-77 1.8.1983 to December, 1983
5. C. EX/CGL/P/SCN/83/662 dated 29.5.1984 4,32,973-40 January 1984 to April 1984
6. C. Ex/CGL/SCN/Price/02/3/425 dated 53,45,026-89 1.7.1980 to 28.3.198 31.7.1980
7. C. EX/CGL/SCN/Price/83/4/089/dated 7,32,787-97 1.1.1983 to 11.7.1983 30.4.1983
8. C.EX/CGL/Price/83/1551/dated 5.12.1983 5,01,534-81 1.5.1983 to 31.10.1983 ________________________________________________________________________________ The appellants filed their replies to each of these show cause notices/demands. Thereafter, by his order dated 9.8.1984 the Assistant Collector rejected the appellants' submissions and confirmed all the 8 demands amounting to Rs. 1,21,35,040-19 under Rule 6b(i) of the Central Excise (Valuation) Rules, 1975 and he also directed the appellants to file price lists in future in proforma in Part IV(A) showing GKW price of Rs. 38.50 per kg. in respect of the highest ratings manufactured for special customs built motors.
4. Being aggrieved by the order dated 9.8.1984 passed by the Assistant Collector the appellants filed an appeal before the Collector of Central Excise (Appeals) who by his order dated 19.4.1985 held that demand No. 1 was clearly time barred and demand Nos. 2,4,6 and 8 were partly time barred. As far as demand at S.No. 1 was concerned he observed that out of Rs. 2,90,116-38 demand in respect of an amount of Rs. 1,18,468-43 was on account of a period beyond 5 years. He further held that in the cases in question there was no suppression of facts, and as such the period beyond six months was not invokable. The Collector (Appeals) remanded the case back to the jurisdictional Assistant Collector of Central Excise for a fresh decision after taking into consideration the prices of other manufacturers as well from whom the Appellants had purchased their requirements. He also directed that the Assistant Collector should keep in view the other observations and directions given in his order and also the observations and directions of the Supreme Court in the case of Bombay Tyre International [1983 ECR 1627D (SC) : ECR C 663 SC].
5. The appeal No. 697/84 filed by the appellants against the order dated 10.1.1984 passed by the Assistant Collector was also decided by the Collector (Appeals) who by setting aside the order and directing the Assistant Collector to re-adjudicate the case in terms of the earlier appellate order dated 19.4.1985.
6. For a considerable period no action was initiated in pursuance of the orders passed by the Collector (Appeals). However, on the same ground for the period between May, 1985 and December, 1987 the department issued 14 more show cause notices mentioned below:
___________________________________________________________________________ Sl. No. Show cause notice No. and date Period Amount ___________________________________________________________________________ 1 2 3 4 ___________________________________________________________________________
9. D.D. 2 No. 1901 dated 3.1.1985 1.5.1984 to 8,98,263-04 31.7.1984
10. CES/CGL/(G)/SCN/83 dated 19.5.1985 December 14,16,197-17 1984 to April, 1985
11. CEX/CGL/Tr./SCN/83 dated 29.11.1985 May, 1985 to 20.94,341-45 October, 1985
12. CEX/CGL/Tr. SCN-83 dated 4.6.1986 November 5,34,069-67 1985 to April 1986
13. CEX/CGL/Tr. SCN/83 dated 6.1.1987 May, 1986 to 84,337-17 17.11.1986
14. CEX/CGI/Tr./VHI/86 dated 30.7.1985 1.7.1984 to 22,24,514-28 30.6.1985 MACHINE DIVISION (FAN DIVISION) ____________________________________________________________________________ 1 2 3 4 ____________________________________________________________________________
15. CEX/CGL/SCN/Price/83-84 dated 16.7.1984 1.11.1983 to 66,91,459-30 31.5.1984
16. DD2No. 1902 dated 28.3.1985 June, 1984 to 2,87,474-10 November 1984
17. CEX/CGL/SCN/Price/84-85 dated 10.7.1987 1.12.1984 to 2,84,470-00 30.4.1985
18. CEX/CGL/SCN/Price/83-84 dated 1.5.1985 to 18,88,444-20 18.12.1985 31.10.1985
19. CEX/CGL/SCN/Price/83-84 dated 6.6.1986 November 15,18,417-40 1985 to April, 1986
20. CEX/CGL/SCN/Price/83-84 dated 6.1.1987 May, 1986 to 22,72,318-87 December, 1986
21. CEX/CGL/SCN/Price/83-84 dated 5.8.1987 1.1.1987 to 30.15,213-76 30.6.1987
22. CEX/CGL/SCN/Price/83-84 dated 5,2.1988 1.7.1987 to 32,01,539-88 31.12.1987 ____________________________________________________________________________ The appellants filed their replies to these show cause notices denying the allegations on the same ground as taken by them in earlier cases. Thereafter by his letter dated 26.9.1989 the Collector of Central Excise, Bombay-II informed them that in respect of these show cause notices they would be granted personal hearing on 24.10.1989. The appellants were also informed that even though the order passed by the Collector (Appeals) required the Assistant Collector to re-examine the cases, as a result of the amendment to Section 11A the jurisdiction in all the pending cases vested with the Collector of Central Excise. Thereafter, the appellants made their submission in regard to all the show cause notices denying the various charges. Finally, by the impugned order dated 16.10.1990 the Collector dropped the proceedings pertaining to demand Nos. 3,4, 5, 9,10, 11, 12, 13 totalling to Rs. 64,74,260-43. However, the other demands totalling to Rs. 93,84,206-88 were confirmed. As far as show cause notice at Sr. No. 14 was concerned the Collector observed that it pertained to a different matter and was being segregated for being dealt with separately.
7. On behalf of the appellants the learned advocate Shri R.G. Seth appeared before us. He stated that the stampings and laminations manufactured by the appellants were different in several respects from those manufactured by other manufacturers from whom such goods were purchased. He added that the wide variation between the quality of the stampings and laminations manufactured by the appellants and that of the products purchased from other parties was mainly on account of the fact that the technology employed by the appellants was different from the technology of other manufacturers. He contended that the stampings and laminations were purchased by the appellants only up to February, 1983. He added that such goods supplied by other parties could not be deemed as 'Comparable goods' in terms of Rule 6(b)(i) of the Central Excise Rules, 1944. He stated that in the case of Rasan Detergents v. Collector of Central Excise , the Tribunal had held that as far as possible 'Comparable goods' should be identical and if they are not so, then proper adjustment in the value on account of the difference in manufacturing process, quality, packing etc. has to be carried out. He added that in the case of Bombay Tyre International Ltd. reported in 1983 ELT 1896 : 1983 ECR 1627D (SC) : ECR C 663 SC the Supreme Court has also observed that goods manufactured by different manufacturers generally differ both in kind and quality and manufacturing and other costs vary from one manufacturer to another depending on the efficiency of the manufacturing techniques, and management methods employed. He contended that on the ratio of these decisions alone, the impugned order in which the appellants' products had been held as 'comparable' with the products of M/s. G.K.W. and no attempt had been made to work out the adjustment on account of the difference in quality, manufacturing technique etc. has to be held as illegal. Shri Seth contended that even if it was assumed that the goods manufactured by the appellants were 'comparable goods' instead of merely taking the average of the assessable values of different suppliers, the Collector should have worked out the adjustment as required under Rule 6(b)(i) having regard to the material characteristics of the goods, quantities produced, time of manufacture of the goods, processes adopted, relative sizes of the manufacturing units and other relevant factors. The learned Counsel further submitted that as far as the show cause notices at Sr. Nos. 1,2,6 and 8 were concerned, they could not have been the subject matter before the Collector once again since no appeal was filed by the department against the order dated 19.4.1985 and 21.4.1986 passed by the Collector (Appeals) holding these appeals as time barred/partly time barred. He contended that order had attained finality in view of the finding of the Collector (Appeals) that in these cases there was no suppression and the extended period under proviso to Section 11A was not, invokable. He submitted that under these circumstances the Collector was not competent to adjudicate the cases which were remanded by the Collector (Appeals) to the Assistant Collector. In support of his contentions he cited the following case law:
(i) Pundhur Paper Mills Ltd. v. Asstt. Collector of Central Excise;
(ii) Geep Indl. Syndicate v. Asstt. Collector of Central Excise; 1990 (48) ELT 83 (Allahabad)
(iii) Sriram Refrigeration Inds. v. CCE .
Shri Seth submitted that confirmation of demand No. 16 was patently illegal since it was issued in the form DD-2 which could not be deemed as a show cause notice. In support of his contention he placed reliance on the judgement of the Supreme Court in the case of Gokak Patel Volkart v. CCE . He contended that the demands for the periods within 6 months issued by the Collector after 1985 were also illegal since such show cause notices could have been issued only by the Assistant Collector and he alone was competent to adjudicate them. He argued that the appellants could not be charged with 'suppression of facts with the intention to evade duty' since the entire gamut of their activity was known to the Department and the price lists for the years 1975 to 1979 were approved finally. He stated that the copy of the price list at page 65 of the paper book was indicative of the fact that the price lists effective from 17.6.1982 were also approved. He contended that some of the price lists pertaining to the year 1980-81 could not be deemed as having been provisionally approved in terms of the Supreme Court's decision in the case of Samrat International Pvt. Ltd., despite the remark "Provisional" occurring on them since the issue in the case decided by the Hon'ble Supreme Court pertained to approval of 'Classification lists' whereas the dispute in the appellants' case pertained to finalisation of price lists. He stated that the price lists pertaining to the period 1975 to 1980 and with effect from 17.6.1982 having been approved finally it was evident that the Department never wanted the price lists to be approved provisionally as understood under the Excise law. He claimed that even the price lists for the period 1.4.1980 to 31.3.1982 have to be deemed as having been approved finally since the remark 'provisional' occurring in some of these price lists was only on account of the uncertainty in regard to the profit margin which could be determined only at the close of the financial year. He stated that the appellants' case was not covered by Rule 173CC. He contended that the impugned order invoking the extended period beyond six months for confirmation of the demands was illegal since the department was at all times aware of the appellants' activities and while declaring the value under Rule 6(b)(ii) the appellants had entertained the bona fide belief that their product was not comparable with other supplier. In support of his submissions he cited the following case law:
(i) CCE v. Chemphar Drugs & Liniments,
(ii) Padmini Products v. CCE, 1990 (43) ELT 195 (S.C.) : 1989 (25) ECR 289 (SC) : ECR C 1507 SC.
8. On behalf of the respondent the learned SDR Shri Ram Prakash reiterated all the findings of the Collector in the impugned order.
9. We have examined the records of the case and the submissions made on behalf of both sides. It is seen that the main question that arises for consideration in this case is whether the Collector was competent to pass the impugned order in the situation when the Collector (Appeals) had remanded the case to the Assistant Collector with the directions to re-adjudicate the case keeping in view the observations and directions given in his order.
10. The respondents'-case is that the Collector was competent to adjudicate the cases since in all the 8 demand-cum-show cause notices which were the subject matter of the appeal before the Collector (Appeals) and 14 other subsequent demands, suppression of facts had been alleged and subsequent to the order dated 11.4.1985 passed by the Collector (Appeals) remanding the case to the jurisdictional Assistant Collector for re-adjudication, Section 11-A of the Act had been amended on 27.12.1985 to provide for adjudication of cases in which proviso to Sub-section (1) of Section 11-A is invoked, only by the Collector. As against this the appellants have contended that the Collector (Appeals) order remanding the case to the Assistant Collector for re-adjudication not having been challenged by the appellants it had attained finality and Collector was not competent to re-adjudicate the case particularly in view of the findings of the Collector (Appeals) that certain demands were time barred and there was no suppression of facts warranting the invocation of the extended period beyond six months in terms of the proviso to Sub-section (1) of Section 11-A.
11. For the proper appreciation of the rival contentions we consider it desirable to refer to the following extracts from the order dated 11.4.1985 passed by the Collector (Appeals):
I find considerable force in their arguments and I find that demands mentioned at S. No. 1 is clearly time-barred, and the demands mentioned at S. No. 2,4,6 and 8 are partly time-barred, whereas the remaining demands at S. No. 3, 5, and 7 are in time. In respect of demand at S. No....(not legible) ....out of which Rs. 1,18,468.43 being time barred beyond five years and the remaining amount of demand was confirmed. In the instant case, I find that there was no suppression of facts, and as such the period beyond six months cannot be invoked.
I agree with this contention of the Assistant Collector. However, when the prices of other manufacturers were also available, it is not understood as to why only the prices of M/s. G.K.W. were taken into consideration. As regards the interpretation of Rule 6(b)(i), the Assistant Collector's view are that the assessee is required to file the price list in proforma VIA and they cannot file price list in proforma VI(B). I do not agree with the views of the Assistant Collector. Finally the Assistant Collector has observed that in the present case, the size of the assessee's unit is the same as that of M/s. G.K.W. and moreover the goods manufactured by M/s. G.K.W. are specifically manufactured by them as per the specifications of the assessee, and if there is slight change in the specifications in the goods supplied by M/s. G.K.W. such electrical stampings and laminations will not be utilisable by the assessee and cannot be permitted to be used by their quality control department. Thus the present case is an exception and the sentence 'Goods manufactured by different manufacturers generally differ in kind and quality1 (quoted by the appellants before the Assistant Collector appearing in the Supreme Court's judgement dated 7.10.1983), is only in the general circumstances. Here it is correct that the goods manufactured by different manufacturers generally differ in kind and quality and in the instant case the appellants were purchasing the goods in question not only from M/s. G.K.W. but also from other manufacturers, and as such the Assistant Collector should have also taken into consideration the prices of other manufacturers and accordingly the prices should have been worked out. Further the Assistant Collector's findings that the size of the assessee's unit is the same as that of M/s. G.K.W. I do not...(not legible).
12. In view of the foregoing circumstances, I set aside the impugned order of the Assistant Collector and remand the case back to the jurisdictional Assistant Collector for re-examination and decide afresh after taking into consideration the prices of other manufacturers as well from whom the appellants have purchased their requirements keeping in view the ob -servations and directions given in the foregoing paras, so also the observations and directions of the Supreme Court of India in the case of Union of India v. Bombay Tyre International reported in October, 1983 ELT1896 (S.C.). The appeal is accordingly disposed of.
13 (sic). On a plain reading of these extracts from the order passed by the Collector (Appeals) it follows that there was a clear finding that certain demands were time barred/partly time barred and it was also held that there being no suppression of facts the extended period beyond six months was not invokable since the finding of the Collector (Appeals) that in the cases in question there was no suppression of facts and it was not permissible to invoke the period beyond 6 months was not challenged in appeal by the respondents, we are inclined to agree with the appellants that these findings had attained finality. In this regard we consider it desirable to refer to para 13 of the judgement of the Allahabad High Court in the case of Geep Industrial Syndicate Ltd. v. Collector of Central Excise which is reproduced below:
13. These observations make it necessary to lay down the extent of jurisdiction which is vested in the Asstt. Collector. The Assistant Collector was required to comply with the directions of the Appellate Collector. As an authority subordinate to the Appellate Collector, it was not competent to the Assistant Collector to take a different view and hold that in view of the decision of the Supreme Court the refund claim of the petitioner on account of the post-manufacturing elements was not admissible in law. So long as the order of the Appellate Collector was not set aside by any court or superior authority the Assistant Collector had no option but to scrupulously follow the directions issued by the Appellate Collector, even if the view expressed by the Appellate Collector was contrary to the law declared by the Supreme Court in the case of Bombay Tyre International Ltd. (supra). Wherever there is hierarchy of courts or authorities, each court or authority is bound by the decision and directions of the higher authority or court. If the subordinate authority is left free to disregard and disobey the findings and directions of a higher authority or tribunal there will be complete indiscipline and the system on which such hierarchy of courts or authority is founded, would not be able to function effectively. The law on the subject is far too firmly established by numerous decisions both of this Court as well as of the Supreme Court to require further elaboration on this point. (See Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal ; the decision dated May 19,1988 in Writ No. 4424 of 1987 connected with Writ Petitions No. 216 of 1988 and No. 8215 of 1987UP Forest Corporation, Lucknow. Income Tax Appellate Tribunal, Lucknow and others). In the latter of these two cases, a Bench of this Court examined this question in depth relying on several Supreme Court decisions and decisions of other High Courts stressing that every authority or court is bound by the decision of a higher authority or court.
14. We find that in the case of Punalur Paper Mills Ltd. v. Asstt. Collector of Central Excise, , the Kerala High Court has also held that the Collector of Central Excise was not competent to ignore the directions issued by the Appellate Collector to the Assistant Collector in his remand order requiring him to assess certain goods with reference to the relevant report of the Chemical Examiner and hold in suo-motu revisional proceedings that the opinion of the Chemical Examiner need not be followed, since such an action was contrary to the remand order which had become final.
15. On the ratio of the decisions quoted above we are inclined to agree with the appellants that the remand order passed by the Collector (Appeals) had become final and could not be ignored by the Collector. For these reasons and in view of the clear finding by the Collector (Appeals) in the case before him that there was no suppression of facts and the extended period beyond six months was not invokable, we are inclined to hold that even after the amendment of Section 11A with effect from 27.12.1985 the Assistant Collector was competent to adjudicate not only the cases which were remanded by the Collector (Appeals) by his order dated 11.4.1984 but also other identical cases in which demands were issued subsequently.
16. It is seen that apart from the demands which were the subject matter of the or-ders-in-appeal Nos. M-649/B.II. 145/85 dated 19.4.1985 and HN-720/B-H-325/86 dated 21.11.1986 by the impugned order, the Collector disposed of 14 other demand/show cause notices which were issued on identical grounds for the subsequent periods. In this regard the Collector arrived at the finding that in respect of goods of 19 ratings which were manufactured exclusively by the assessee the assessable value had been correctly declared in the price lists on the basis of the manufacturing costs plus profit in terms of Rule 6(b)(ii) of the Central Excise (Valuation) Rules, 1975. However, in respect of goods of 28 others ratings, which were manufactured by the appellants and also purchased from other manufacturers he held that the extended period beyond six months in terms of the proviso to Sub-section (1) of Section 11-A could be invoked for the recovery of the short levy since by declaring in the relevant price lists that the prices of comparable goods were not available the assessee had wilfully suppressed facts with the intention of evading duty by declaring lower prices. He also held that the assessment made in terms of certain price lists which were endorsed as having been 'provisionally approved' had to be deemed as 'provisional' and the 'relevant date' for determining the validity of the demands in such cases had to be deemed as the date of adjustment of duty after final assessment
17. In this regard the appellants have contended that they could not be charged with suppression of facts since the entire gamut of their activity was known to the Department since their price lists for the years 1975 to 1979 and also with effect from 17.6.1982 were approved finally. It has been further contended that in declaring the assessable value of the goods captively consumed on the basis of the manufacturing cost plus profit they had acted under the bonafide belief that their goods were not comparable with the goods manufactured by other suppliers. They have contended that even though the expression 'provisional' was mentioned in certain price lists on account of 'margin of profit' being ascertainable only at the end of the year, the assessments could not be deemed as provisional since B-13 Bond was not demanded. They have argued that the price lists having been approved regularly during the period 1975 to 1979, and also from 17.6.1982, it is evident that the Department never intended to assess the goods provisionally. It has also been contended that in the Supreme Court's judgement in the case of Samrat International Pvt. Ltd. reported in 1992 (58) ELT 364 : 1991 (33) ECR 19 (SC) was relevant since it pertained to classification list whereas the appellants' case related to the price lists.
18. In the case of Collector of Central Excise v. Camphor Drugs and Liniments the Hon'ble Supreme Court has held that in order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of proviso to Sub-section (1) of Section 11A of the Act, it has to be established that something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew or otherwise, is required before he is saddled with any liability for the period beyond six months. The relevant extract from para 8 of the judgement is reproduced below:
In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to Sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied, or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any Act, is a question of fact depending upon the facts and circumstances of a particular case.
It is seen that the price lists for the years 1975 to 1979 and also the price list effective from 17.6.1982 were finally approved by the department. The appellants have also submitted that they could not have had any motive to suppress any fact or misdeclare the value of the goods since duty paid on stampings was allowed to be recovered by way of set-off. Under these circumstances we are inclined to agree with the appellants that while declaring in the relevant column relating to prices of comparable goods in the price lists filed under the provisions of Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 as 'Not applicable' they had acted under the bona fide belief that the stampings and laminations manufactured by them for captive consumption were not comparable with the stampings and laminations purchased by them from other parties. For these reasons we also find that there was no infirmity in the findings of the Collector (Appeals) that in respect of the demands issued to the appellants there could be no charge of wilful suppression of facts and accordingly the extended period beyond six months for recovery of dues was not invokable.
19. In respect of the assessments made in terms of certain price lists which were marked as 'provisional' the appellants have contended that they could not be deemed as 'provisional' since no B-13 Bond was executed in terms of Rule 9B. It has been Stated that the relevant price lists were marked 'provisional' only for the reasons that the margin of profit on the goods in question would have been known at the end of the year. For these reasons the appellants have argued that such price lists have also to be deemed as having been finally approved. In this regard we find that in the case of Samrat International (P) Ltd. v. Collector of Central Excise, the Hon'ble Supreme Court has held that assessments of goods cleared by an assessee between the date of filing of the classification/price lists and the approval of such lists by the proper officer have to be deemed as provisional even ifB-13 bond is not executed. Para 9 of the said judgement being relevant is reproduced below:
9. This is the scheme for the payment of duty for clearance of goods by the manufacturers. This procedure is known as self-removal procedure. There will be no time bar for refund if the duty is paid under protest. The period of 6 months is prescribed in other cases. As we have already seen, Section 11B says that the period of 6 months 'In a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof. In this case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.1985. From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer. However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of the goods. In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account. The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned. This is the procedure prescribed under Rule 9B except for the circumstance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time. In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd June, 1985 were in accordance with the procedure for provisional assessment. In such a situation Clause (e) of para (B) of the Explanation under Section 11B will be attracted. In this case the RT-12 Return for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985. It is, therefore, only from the date of this assessment that time bar in Section 11B will operate. In the present case the refund application had been filed on the 30th of October, 1985. It cannot, therefore, said to be time barred.
other requirements laid down in proviso to Rule 6(b)(i) of the Central Excise (Valuation) Rules, 1975 should have been taken into account by the department while determining the assessable value. We are inclined to agree with the appellants that while determining the price by averaging the sale price of different manufacturers the Collector had ignored the criteria laid down in the proviso to Rule 6(b)(i).
21. In view of the above discussion and having regard to the findings by the Collector (Appeals) that the charge of wilful suppression was not sustainable, we hold that the case remanded under the orders passed by the Collector (Appeals) and even the case relating to the demands which were issued subsequently could have been adjudicated by the jurisdictional Assistant Collector. We, therefore, set aside the impugned order, and remand the matter to the Assistant Collector having jurisdiction for re-adjudication in accordance with law. While deciding these cases he should keep in view the observations and findings in this order and also in the orders passed by the Collector (Appeals). We further direct that before deciding the matter the appellants should be granted personal hearing.