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1. These appeals have been filed against the order dated 29-11-1991 passed by the Collector of Central Excise, Delhi. The brief facts are that M/s. I.T.C. Ltd., the appellants herein have their factories at Munger, Bangalore, Bombay, Saharanpur and Kidderpore (Calcutta) engaged in the manufacture of cigarettes and smoking mixtures in the unit at Munger and cigarettes in the remaining four units. The Department's case is that intelligene was collected by the Assistant Collector of Patna that the units of the appellants were collecting administrative charges on freight from their wholesale dealers through Debit notes in respect of these goods. On a visit to the Unit at Munger in response to the queries from the Department in its letter dated 13-8-1986, it was informed that administrative charges were being realised. By a letter dated 29-8-1986, the appellants informed that for making necessary arrangements for transportation, they had to deploy men, material and stationery and also assets of substantial value like computer system. They have also to incur expenses on account of freight payable by the Company's customers and that, therefore, such activities resulted in additional cost to the appellants. It was contended that the totality of these costs represented the administrative expenses and that the appellants recovered such expenses from the customers on a pro rata basis in addition to the actual freight paid by the company to the transporters as a necessary incidence of the cost of transport. It was the appellants' contention, the administrative charges are to be treated as part and parcel of the cost of transportation.

The Patna Collectorate obtained a statement from the Commercial Manager of Munger Unit and Shri S.P. Singh, Proprietor of M/s. Patliputra Tobacco Company, Patna said that the administrative charges are not normally shown in the trading invoices of the smoking mixture but are being realised from them and that Debit is raised by the Company by Freight Debit Notes on monthly basis. It was found that the monthly statement issued by M/s. I.T.C. Ltd. to M/s. Patliputra Tobacco Company during April, 1985 to January, 1986 showed that the collection on account of administrative charges have not been indicated therein. It was further found that the appellants had collected freight administrative charges on cigarettes from 1-11-1979 to 28-2-1983 only whereas such collection continued in respect of smoking mixture beyond that date. On the basis of action taken by the Patna Collectorate and show cause notice issued the other Collectorates concerned at Bombay, Bangalore, Meerut and Calcutta issued similar show cause notices and also proposed to add the additional amount by way of administrative charges to the assessable value of cigarettes and smoking mixture and various amounts of demand were raised. The differential excise duty for cigarettes demanded under Section 11A of the Central Excises and Salt Act, 1944 amounts to Rs. 4,88,50,078.68. There was also proposal to impose penalty on the appellants for the contravention. The appellants contended in the reply mainly that freight administrative charges were part and parcel of transportation cost which was not includable in the assessable value. The appellants further contended that even assuming that the charges were to be included, then they have to be added to the cum-duty price and not to the assessable value. They also resisted the proposal to impose penalty on various grounds. The Collector of Central Excise after considering their reply and hearing them in the matter held that the sums collected as administrative charges on freight were not relatable to the cost of transportation. These were additional consideration and, therefore, were to be treated within the provisions of Section 4(1 )(b) read with Rule 5 of the Valuation Rules, 1975 and he further held that for the purposes of determining the assessable value under Rule 5 of the Valuation Rules, the amounts collected as administrative charges on freight have to be added to the assessable value. He also held that the appellants were liable for penalty under Rules 173Q and 209 of Central Excise Rules. He confirmed the demand for differential duty in respect of Bombay and Bangalore Units of the Company and gave direction to the concerned Assistant Collectors at Saharanpur, Patna and Calcutta to finalise the demand on the basis of his findings in the order: A penalty of Rs. 50/- lakhs was imposed on the appellants. The present appeals arise out of the above order of the Collector of Central Excise, Delhi.

The learned Senior Counsel referred to Para 49 of the Supreme Court in Bombay Tyre International Ltd. case reported in 1983 (14) E.L.T. 1896 (S.C.) and contended that the exclusion from the assessable value is specific for transport cost and also covers insurance. It cannot be interpreted to mean analogous charges are also to be excluded on that basis. The learned Senior Counsel referred to the High Court decision cited and relied upon by the appellants and urged that none of the High Court decisions are specific on freight administrative charges. Regarding the penalty on the appellants, the learned Senior Counsel argued that the appellants cannot say that they did not include freight administrative charges relying upon the then existing judicial pronouncement under Section 4 prior to Supreme Court decision on Bombay Tyre International case. No decisions existed specifically even at that period on freight administrative charges. In the same context, the physical control of clearances would only mean that clearances were granted by the officers on AR-I presented by the appellants. The learned Senior Counsel also submitted that though Rule 209 of Central Excise Rules for imposing penalty was not in existence at the time of offence, yet it was in force at the time of issue of show cause notice and the law applicable at that time can be invoked. The learned Senior Counsel relied upon the Larger Bench decision in the case of Atma Steels Pvt. Ltd. and Ors. v. Collector of Central Excise, Chandigarh and Ors. reported in 1984 (17) E.L.T. 331 (Tribunal). He also relied upon AIR 1953 Sup. Court 221 - M/s. Hoosein Kasam Dada (India) Ltd v. The State of Madhya Pradesh and Ors. that law applicable at the time of when the offence arises is be one to be applied. The learned Senior Counsel also contended that invoking Rule 9(2) of Central Excise Rules has to be seen in the background of the facts set forth in the show cause notice and as long as there was evasion of duty, the Rule can be invoked notwithstanding physical control over the Unit by the Department. The Supreme Court decision in the case of N.B. Sanjana, Assistant Collector of Central Excise, Bomaby and Ors. v. The Elphinstone Spinning and Weaving Mills Co. Ltd., reported in AIR 1971 S.C. 2039 is not applicable because the present case is not one of erroneous classification of the goods and clearances thereof on that basis after assessment. On the other hand, the present case is one of non-disclosure by the appellants of the flew back of the amount of freight administrative charges through Debit Notes. The penalty on the appellants is hence in order, it was pleaded.

6. In respect of the penalty imposed on the appellants under Rule 209, it is seen that this Rule was not on the Statute Book at the material time when the offence alleged had taken place. It is however, seen that the Finance Ministry in its Circular No. 5/86, dated 18-2-1986 have clarified that the Rule 209 is to be invoked only for offences committed on or after 30-1-1986. This was on the basis that Article 20(1) of the Constitution lays down that no person can be subjected to penalty for an offence greater than that which might have been inflicted under the law in force at the time of commission of the offence. In such a context of the Department's own understanding while introducing the Rules, a penalty on the appellants under Rule 209 is not sustainable at the time when the Rule was non-existent. However, the penalty has also been imposed under Rule 9(2). It is well settled by the decision of the Tribunal in M/s. Agam & Gem Laboratories v. Collector of Central Excise, Baroda, reported in 1988 (38) E.L.T. 479 (Tri.) that when complete particulars are not disclosed, the penalty under Rule 9(2) is justified and it was observed therein by the Tribunal that in furnishing the full particulars if the assessee had any doubt, he should get it clarified by the Department. In this context, it may be seen that in the present case the appellants herein had totally failed to disclose the amount recovered by way of freight administrative charges in their price lists which was only subsequently found by the Department. In this context, the decision of the Supreme Court in the case of Jaishri Engineering Co. (P) Ltd. v. Collector of Central Excise, reported in 1989 (40) E.L.T. 214 (S.C.) may also be borne in mind wherein the Supreme Court held that even the plea that the Departmental Officers visited the assessees' factory and should have been aware of the processes and production of the goods will be of no avail to the assessee and will not be a reason for the assessee not to truly and properly to describe the goods. It is further seen that even where an assessee indicated certain element of costs in their sale invoice but had not shown them in their price list, assuming those to be deductible, the Tribunal in the case of Kerala State Detergents & Chemicals Ltd. v. Collector of Central Excise, Cochin, reported in 1987 (27) E.L.T. 312 (Tri.) held that it is for the appropriate officer to determine the assessable value on materials placed before him by the assessee and that assessee cannot deduct whatever he presumed deductible and expect the officer to accept it without demur. The assessee, the Tribunal held has to declare the actual price and furnish detailed particulars of the elements of which he claims exclusion. In the present case, the appellants herein have not at all indicated the freight administrative charges in their price list and as has been found by the Tribunal, the assessee cannot hold back any particulars relating to the elements which go into the price while presenting the price list. It is also seen from the records that the appellants were realising additional consideration which is in dispute only through freight debit notes and were not showing it even in Trading Invoices. It is also observed that the practice of recovery of freight administrative charges continued in the case of smoking mixture even after the judgment of the Supreme Court in Bombay Tyre International Ltd. etc., etc. case. In such circumstances, imposition of penalty under Rule 9(2) read with Section 11A of the Central Excises and Salt Act, 1944, is sustainable.