2000 (2) TMI 315 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposition on manufacturers of washing powder under Chapter 3402.90 for Central Excise Act.
2. Correctness of deductions claimed by the appellants from the sale price for assessing the goods under Section 4 of the Central Excise Act.
3. Demand made under Proviso to Section 11A(1) of the Central Excise Act for the extended period due to suppression of facts while filing price list.
4. Handling and transportation charges, interest on security deposits, and deduction towards Sales Tax disputed by the appellants.
5. Justification for including handling and transportation charges in the assessable value of excisable goods.
6. Nexus of security deposits with the sale price of goods and any extra benefit derived by the appellants.
7. Permissibility of deduction towards sales tax under Section 4(4)(d)(ii) of the Central Excise Act.
8. Time bar issue in invoking the extended period under proviso to Section 11A(1) for demanding duty.
9. Lack of access to records during adjudication proceedings and the need for remand to jurisdictional authorities for fresh consideration.
10. Examination of the time bar issue by the adjudicating authority for the entire demand.

Analysis:
1. The appellants, manufacturers of washing powder, were subjected to duty demand and a penalty under Chapter 3402.90 of the Central Excise Act. The impugned order confirmed a duty demand of over Rs. 7 lakhs and imposed a penalty of Rs. 50 thousand on the appellants. The dispute arose from the correctness of deductions claimed by the appellants from the sale price to determine the assessable value of the goods under Section 4 of the Central Excise Act.

2. The demand was made under the Proviso to Section 11A(1) of the Central Excise Act for the extended period due to alleged suppression of facts while filing the price list. The appellants contested the demand related to handling and transportation charges, interest on security deposits, and deduction towards Sales Tax. They argued that the handling and transportation charges were post-manufacturing activities and should not be included in the assessable value of excisable goods.

3. Concerning the security deposits, the appellants claimed that the deposits had no nexus with the sale price of the goods and that they had mostly returned the deposits or paid interest to the dealers. They argued against any additional benefit derived from the security deposits warranting an increase in the sale price. Regarding the deduction towards sales tax, the appellants relied on Section 4(4)(d)(ii) of the Central Excise Act to support their claim for deduction based on the liability to pay sales tax, irrespective of actual payment.

4. The time bar issue was raised regarding the invoking of the extended period under the proviso to Section 11A(1) for demanding duty. The appellants contended that there was no suppression of facts as all relevant information was known to the Central Excise Authorities, and the demand should be considered time-barred. The need for remand to the jurisdictional authorities for a fresh consideration of various issues, including access to records during adjudication proceedings, was highlighted.

5. The appellate tribunal, after perusing the records and considering the submissions, remanded the case to the jurisdictional Commissioner for a fresh order. The appellants were directed to have adequate opportunities to present their case and access to records for an effective defense. The issue of time bar affecting the entire demand was to be examined by the adjudicating authority, ensuring a comprehensive review of all aspects before a final decision.