1987 (7) TMI 267 - AT - Central Excise

Summary

Issues:
1. Deduction of post-manufacturing expenses claimed by the respondents.
2. Barred by limitation - whether the demand for duty is time-barred.
3. Allegation of suppression of facts with intent to evade duty.
4. Submission of price lists and intent to evade duty.
5. Failure to furnish invoices and its impact on the case.
6. Provisional assessment under Rule 9-B and its relevance.
7. Whether the department safeguarded revenue during the inquiry.
8. Applicability of extended period for raising demand.
9. Comparisons with relevant case laws - Jay Prestressed Products Ltd., Khardah Company Ltd., Porritts & Spencer (Asia) Ltd.
10. Final decision on the demand for duty.

Analysis:

The judgment by the Appellate Tribunal CEGAT, New Delhi involved a case concerning the deduction of post-manufacturing expenses claimed by the respondents. The Assistant Collector had raised a demand of Rs. 2,49,415.08, rejecting the claim of the respondents and deeming the demand time-barred. The Collector (Appeals) upheld the time-barred decision, leading to the department appealing the order. The department alleged suppression of facts by the respondent company, citing delays in submitting invoices and price lists as evidence of intent to evade duty.

The department argued that even if suppression of facts was not proven, the matter was subjudice and ultimately led to a de novo decision by the Collector (Appeals). They also highlighted the late submission of price lists by the respondent company as further proof of intent to evade duty. The department relied on various case laws to support their arguments.

In response, the consultant for the respondents refuted the allegations of failure to furnish invoices and argued that the delay was due to the Assistant Collector's inaction. The consultant emphasized that the price lists submitted matched those of M/s. Garware Paints Ltd., indicating no intent to evade duty. The Tribunal acknowledged the late submission of price lists but noted that they were voluntarily submitted, absolving the respondent company of any deliberate evasion.

Regarding the failure to furnish invoices, the respondent company denied the allegation, shifting the burden of proof to the department. The Tribunal observed that the department failed to provide evidence of correspondence regarding provisional assessments or open issues on assessable value. The Tribunal also considered the department's reliance on case laws but found them inapplicable to the present case.

Ultimately, the Tribunal upheld the Collector (Appeals) decision that the demand was time-barred, rejecting the department's appeal. The judgment emphasized the importance of safeguarding revenue during inquiries and highlighted the need for provisional assessments under Rule 9-B. The decision underscored the significance of timely decisions by the Assistant Collector and the lack of evidence supporting the department's claims of evasion.