1985 (2) TMI 160 - AT - Central Excise

Summary

Issues:
- Inclusion of delivery and collection charges in the assessable value for excise duty calculation.
- Time-barred show cause notices and alleged suppression of facts.
- Applicability of Notification No. 313 of 1977 regarding exemption for the cost of packing.

Issue 1: Inclusion of delivery and collection charges in the assessable value:
The appeal pertains to the department challenging the order of the Collector of Central Excise (Appeals) concerning the inclusion of delivery and collection charges in the assessable value for excise duty calculation. The respondents, manufacturers of oxygen gas, had a contract with a buyer, and the rates were fixed by the DGS&D. The department contended that these charges should be part of the assessable value. However, the respondents argued that these charges were for distribution and collection after the goods were manufactured and should not be included in the assessable value. The Tribunal agreed with the respondents, stating that these charges were incurred post-manufacturing and were not related to the manufacturing process, thus should not be included in the assessable value.

Issue 2: Time-barred show cause notices and alleged suppression of facts:
The department issued show cause notices beyond the statutory period of 6 months, alleging a short levy due to the exclusion of delivery and collection charges from the assessable value. The respondents argued that the notices were time-barred and did not mention any suppression of facts. The Tribunal noted that the notices were amended incorrectly and referred to rules that were no longer in force, indicating a procedural flaw. Moreover, the respondents had disclosed the charges in their price lists, showing no willful suppression of facts. Consequently, the Tribunal held that the notices were time-barred and lacked grounds for suppression of facts.

Issue 3: Applicability of Notification No. 313 of 1977 regarding exemption for the cost of packing:
The Tribunal considered Notification No. 313 of 1977, which granted an exemption for the cost of packing for certain items, including oxygen. The notification exempted the cost of packing if it was durable and returnable. The respondents argued that the charges in question related to the supply of gas in containers, which were returnable, thus qualifying for the exemption. The Tribunal acknowledged the applicability of the notification and allowed the respondents to claim the benefit of the exemption.

In conclusion, the Tribunal dismissed the department's appeal and upheld the order of the Collector of Central Excise (Appeals), ruling in favor of the respondents regarding the inclusion of delivery and collection charges in the assessable value, the time-barred show cause notices, and the applicability of the exemption notification for the cost of packing.