1993 (8) TMI 194 - AT - Central Excise

Summary

Issues Involved:
1. Condonation of delay in filing appeals.
2. Determination of the nature of sales (wholesale vs. retail) for Fork Lift Trucks.
3. Eligibility for permissible deductions in assessable value.
4. Application of the principle of res judicata.

Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The appellants filed ten appeals against the orders confirming the demands raised by the Assistant Collector of Central Excise. The original appeal was filed within the specified period of limitation, but the other nine appeals were filed after the expiry of the period. The Tribunal held that when only one order-in-original covers more than one show-cause notice, it is not necessary to file separate appeals for each show-cause notice. Despite this, the Tribunal condoned the delay in filing the nine additional appeals, considering the facts and circumstances.

2. Determination of the Nature of Sales (Wholesale vs. Retail) for Fork Lift Trucks:
The appellants, engaged in manufacturing Fork Lift Trucks, filed price lists claiming 7.5% as permissible deductions, indicating the trucks were sold in retail. The Assistant Collector concluded that the sales were to industrial consumers, government, and local authorities, and thus amounted to wholesale trade under Section 4(1)(a) of the Central Excises and Salt Act, 1944. The Tribunal, however, held that the sales were retail transactions as the buyers did not purchase the trucks for resale but for their own use. The Tribunal referenced previous decisions, including Collector of Central Excise v. Escorts Ltd., Modi Zerox Ltd. v. Collector of Central Excise, and Collector of Central Excise v. Indian Communication Network Ltd., to substantiate that the nature of the transaction, not the nature of the goods, determines whether a sale is wholesale or retail.

3. Eligibility for Permissible Deductions in Assessable Value:
The appellants argued that they had been correctly filing their price lists in Proforma V, claiming deductions of 7.5% as stipulated under Rule 6(a) of the Central Excise (Valuation) Rules, 1975. The Tribunal found that the appellants' practice of claiming deductions was previously accepted by the authorities, and the sales were in limited numbers for personal use, not constituting wholesale trade. Consequently, the Tribunal upheld the appellants' eligibility for the 7.5% deduction.

4. Application of the Principle of Res Judicata:
The Tribunal noted that the issue of whether the sales were retail had already been decided in favor of the appellants in previous orders, which were not appealed by the department. The Tribunal emphasized that the principle of res judicata applies, preventing the same issue from being re-litigated. The Tribunal criticized the adjudicating authority for disregarding the earlier decisions, highlighting the importance of judicial discipline and consistency.

Conclusion:
The Tribunal allowed the appeal, setting aside the orders passed by the authority below. It concluded that the sales of Fork Lift Trucks were retail transactions, and the appellants were entitled to the 7.5% deduction. The demand for differential duty was not sustainable, and consequential reliefs were to follow.