Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Woodcraft Products Ltd. on 3 December, 1991
Equivalent citations: 1995(75)ELT647(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Brief facts of the case are as follows :-
1.1 The respondent firm submitted a price list effective from 1-4-1979 in respect of one side Decorative Plywood-Moon Brand (rejected). They produced some sale bills and statement for break-up of expenditure on account of transportation of the goods alongwith the supporting documents. The Assistant Collector of Central Excise, Dibrugarh was satisfied that the average cost of transportation of 0.37 p per sq. mt. on 1 mm thickness basis from the place of removal to that of delivery of the goods, as worked out by the factory was reasonable and therefore allowed the deduction of the same from the normal sale price of such goods sold by the assessee at their sale centre at Bombay. Later on, however, it was found that as per the sale bill an amount of 0.65 p per sq. mt. on 1 mm thickness basis was realised on account of transportation and other local expenses by the buyers as against the approved deduction of 0.37 p, mentioned supra. The Assistant Collector, therefore, finalised the assessable value by adding the additional amount of realisation of 0.28 p per sq. mt. on 1 mm thickness basis. Being aggrieved with the aforesaid order regarding approval of assessable value by the Assistant Collector, the respondents herein filed an appeal before the Appellate Collector of Central Excise, Calcutta who allowed the appeal in favour of the respondents herein vide his order-in-appeal No. 139-145/ACM/81, dated 14-8-1981 with consequential relief on the ground that the rates of goods charged tallied with the rates as approved in the price list and the additional charges like transportation expenses etc. were separately identifiable from the sale bills. Thus, the said Collector held that the wholesale price at the factory gate was ascertainable and there was no reason to go into the price structure for sale at Bombay.
1.2 The Central Government in exercise of its powers under Section 36(2) of the Central Excises & Salt Act, 1944, as it stood at that time issued a notice thereunder on 12-7-1982 seeking to review the aforesaid order of the Appellate Collector, Calcutta. By the said show cause notice the respondents herein were asked to show cause as to why the Appellate Collector's order dated 14-8-1981 be not set aside and further suitable orders as deemed fit be passed.
1.3 It is this show cause notice issued by the Central Government which stands transferred as an appeal under the provisions of Section 35F(2) of the said Act.
2. A preliminary point has been raised by Shri K. Kumar, learned advocate for the respondents. He submits that the show cause notice is barred by time inasmuch as it has been issued beyond the period of six months which is the time limit spelt out in the third proviso to erstwhile Section 36(2) within which the notice should have been issued.
2.1 To this preliminary objection, the learned SDR, Shri B.S. Ganu for the appellant-Collector has urged that this show cause notice does not seek to levy any duty or demand any short levy or recover any erroneous refund; it is merely a notice to revise the assessable value of the goods which has been fixed at a certain level by the Appellate Collector's order. He submits that there are decisions in his favour that it is not the third proviso to Section 36(2) which would be applicable to such cases but it is the second proviso to that Section which provides the time limit of one year for issuing show cause notices that would be applicable. For this proposition he relies upon Allahabad High Court's judgment in the case of Triveni Sheet Glass, reported in 1983 (12) E.L.T. 711 (Para 27). He also relies on Tribunal's recent judgment in Order No. 1021/90-A, dated 21-6-1990 in the case of Food Specialities Ltd. v. C.C.E., Chandigarh. In this judgment the Tribunal has held that Sub-section (4) of erstwhile Section 35A [which corresponds to second proviso to erstwhile Section 36(2)] is applicable in a matter relating to the approval of price list since it does not relate to short levy or non-levy. It is only a matter relating to short levy or non-levy or recovery of erroneous refund to which the provisions of Sub-section (3) [which corresponds to third proviso to erstwhile Section 36(2)] of erstwhile Section 35A would apply.
2.2. Rebutting this contention, the learned advocate for the respondents has submitted that the aforesaid Order No. 1021/90-A, dated 21-6-1990 of the Tribunal does not take into account the series of judgments of the Tribunal which are based on the judgment of Delhi High Court. The judgments of the Tribunal relied upon by the learned advocate are as follows :-' (1) 1987 (27) E.L.T. 202 [CCE, Delhi v. Fedders Lloyd Corporation Ltd.];
(2) 1987 (29) E.L.T. 957 [CCE, Bombay v. RMDC Press Pvt. Ltd.];
(3) 1988 (35) E.L.T. 233 [CCE, Bombay v. Tata Mills Ltd.];
(4) 1991 (53) E.L.T. 82 [CCE v. Voltas Ltd.].
The learned advocate has further submitted that Tribunal's decision in RMDC's case, mentioned supra also takes into account High Court's judgment in the case of Triveni Sheet Glass. He has also submitted that some of these judgments are of three Members whereas the judgment of the Tribunal in Order No. 1021/90-A, dated 21-6-1990 has been passed by two Members without noticing any earlier judgments of the Tribunal on this point. The learned advocate submits that the effect of the show cause notice, which is now an appeal before the Tribunal is to demand duty from the respondents although it may notice [sic] terms be so and merely speaks of revising the assessable value. As such, he submits that third proviso to erstwhile Section 36(2) would be applicable, as has been held in the aforesaid citations relied upon by him.
3. We have carefully considered this plea without going into the merit of the other issue, namely, whether the factory gate price of the goods is ascertainable or not in this case. After having considered the citations advanced from both sides across the Bar, we agree with the learned advocate for the respondents that the show cause notice is barred by time inasmuch as third proviso to erstwhile Section 36(2) would apply in this case and therefore, the time limit for issuing the show cause notice for revising the order of the Collector was six months whereas the show cause notice has been issued beyond that period. In this context para 15 of Tribunal's Three Member Bench Judgment (decided by 2 :1 majority) in the case of RMDC mentioned supra, is reproduced below :-
"It must be noted in this context that the Appellate Collector had, after holding that there was no reason why the concession extended by the Government of India to M/s. Allibhoy Sharefally & Co. (Order-in-revision No. 2057 of 1977-Supra) should not be extended to R.M.D.C., allowed the appeal with consequential relief, if any. The relief would have been -
(a) refund, if duty had been charged from, and paid by, R.M.D.C.
(b) withdrawal of demands for duty, if duty had not been paid by R.M.D.C. Whereas the Assistant Collector's Order had the effect of levying duty, that of the Appellate Collector had the effect of nullifying that levy or, in other words, directing no levy. In this background, the effect of adjudication of the Section 36(2) notice issued by the Government against R.M.D.C. would be to restore the levy, in other words, cancelling the order of non-levy. Though the review notice does not talk in terms of short-levy or non-levy the drift is quite clear. It is clearly not meant to pose and answer a question in the abstract: were printed cartons manufactured by R.M.D.C. liable to pay duty under Item 68 CET or were they eligible for exemption in terms of Notification 55/75? The object of the issue of notice was, if ultimately the proceedings led to the conclusion that the goods were liable to pay duty, to set aside the order of the Appellate Collector extending the benefit of exemption 'with consequential relief, if any."
This judgment of the Tribunal also noticed and discussed the judgment of Allahabad High Court in Triveni Sheet Glass Works in Para 19 of the said Report. Since the present impugned order passed by the Appellate Collector of Central Excise, Calcutta also gives relief to the respondents 'with consequential relief, the judgment of the Tribunal in RMDC would apply with full force. Hence the appeal is dismissed with consequential relief to the respondents.