TMI Blog2006 (5) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... holesale cash price of the petitioners' refrigerators, for excise purposes. Revenue has no case and assuming but not admitting that the refund is erroneous, the same cannot be recovered without review of the refund order dated 20-4-1990 - The impugned OIA is set aside - appeal allowed. - Dr. S.L. Peeran, Shri T.K. Jayaraman, JJ. Shri G. Shivadass, Advocate, for the Appellant. Shri K. Sambi Reddy, JDR, for the Respondent. Order per : T.K. Jayaraman, Member (T) This appeal has been filed against the Order-in-Appeal No. 99/99 (H-III)-C.E., dated 23-9-1999 passed by the Commissioner of Customs and Central Excise, Hyderabad. 2. The brief facts of the case are as follows :- The appellant is a manufacturer of Refrigerators. The issue relates to the inclusion of the cost of carton cardboard packing in the assessable value of the refrigerator. Consequent to CEGAT s order dated 26-10-1988, the matter was remanded to the Asst. Commissioner. A Show Cause Notice dated 10-5-89 was issued to disallow the deduction claimed on account of the cost of carton cardboard on the ground that the same is in the nature of secondary packing. The Asst. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the order sanctioning refund is not challenged and set aside by an appellate authority, then the Show Cause Notice proposing to recover the refund granted issued under Section 11A of the Central Excise Act is not sustainable. The following case laws are relied on :- ( a) Bajaj Auto Ltd. v. UOI - 2003 (151) E.L.T. 23 (Bom.) = 2002 (105) ECR 798 (Guj.) (b) Doothat Tea Estate Kanoi Plantation (P) Ltd. v. CCE - 2001 (135) E.L.T. 386. (c) CCE v. Assam Forest Product (P) Ltd. - 2000 (125) E.L.T. 613. (d) Sree Digvijay Cement Co. Ltd. v. CCE - 1991 (52) E.L.T. 631 (e) Fag Precision Bearings Ltd. v. CCE - 1999 (114) E.L.T. 684. (f) Order dated 4-7-2001 of the High Court of Judicature at Madras in Writ Appeal No. 1096 of 1993 filed by Ion Exchange (I) Ltd. In any case, the adjudication order sanctioning refund contains a factual finding that the cost of carton cardboard is not includable in the assessable value. (ii) In view of Law Ministry s opinion dated 31-10-1985, the refund made in pursuance of a valid order of an Asst. Collector cannot be treated as erroneous refund . Erroneous refund refers to refunds made on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) I.T.I. Ltd. v. CCE - 2001 (129) E.L.T. 724 . (vi) The trade practice was of selling refrigerators only with polythene packing has received judicial approval of the Bombay High Court in the case of Godrej Boyce Manufacturing Co. (P) Ltd. v. UOI reported in 1984 (18) E.L.T. 172 (vii) Despite the above-mentioned factual position, the Commissioner passed the impugned order disregarding the practice recognized by the Bombay High Court. (viii) The Department has failed to produce any proof to show that the carton packing is in the nature of primary packing. The appellants averment has not been rebutted by the Department and therefore, it is deemed to have been accepted that refrigerators are capable of being sold in wholesale market with only polythene covering. Reliance is placed on the following case laws. (a) LG Industries v. CCE - 2002 (148) E.L.T. 43. (b) Kesar Enterprises Ltd. v. CCE - 2003 (155) E.L.T. 100 (c) Garima Enterprises Pvt. Ltd. v. CCE - 2005 (182) E.L.T. 106. (d) S.K. Gems v. CC - 1999 (105) E.L.T. 208. (e) CCE v. Shankar Novelties Glass Industries - 1991 (51) E.L.T. 144. 5. The learned JDR submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 35E of the Central Excise Act or demands under Section 11A within the statutory time limit as laid down. The S.C. in the case of CCE v. Re-rolling Mills [reported in 1997 (94) E.L.T. 8 (S.C.)] has inter alia held as following: The learned Counsel for the parties do not dispute that this appeal is covered by the decision of this Court in Union of India Ors. v. Jain Shudh Vanaspati Ltd. Anr. 1996 (86) E.L.T. 460 (S.C.) = (1996) 10 SCC 520. In that case the Court was dealing with Section 28 of the Customs Act which is in pari materia with Section 11A of the Central Excise Act. The said decision is thus applicable to the present case also. For the reasons given in the said judgment, the appeal is dismissed. In this context the point to be stressed is that the Order passed U/S 35E(2) does not automatically result in the recovery of the refund. This has to be followed by SCN U/S 11A which should be issued within 6 months from the date of actual refund. Since time limit for filling appeal U/S 35E(2) is longer than the time limit prescribed U/S 11A, the SCN should proceed the proceedings U/S 35E(2). This view has been supported by the opinion of the law Minist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following :- Valuation - Meaning of special secondary packing - Extra packing for transporation and delivery of goods to wholesale buyers in outside towns and cities is special secondary packing execludible from assessable value Interpretation of Supreme Court decision in Bombay Tyre International s case - Section 4 of the Central Excises and Salt Act, 1944. - The Supreme Court in Bombay Tyre International s case - 1986 (14) E.L.T. 1896 has observed that costs of packing in which the goods are ordinarily sold in the wholesale trade at factory gate are includible in the assessable value. The Supreme Court further observed that a degree of secondary packing which is necessary for putting the excisable article in the condition in which it is generally sold in the wholesale market at the factory gate is a degree of packing whose cost is to be included in the assessable value for the purpose of excise. Therefore, in view of this observation of the Supreme Court it is the degree of secondary packing which is the determining factor whether its cost is includible in the assessable value or not. A packing which may be required for a wholesale market in some remote area is not the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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