1988 (9) TMI 180 - AT - Central Excise

Issues:
1. Inclusion of the cost of card board cartons in the assessable value of goods.
2. Time bar for Revision Show Cause Notice under Section 36(2).
3. Transfer of proceedings from Central Government to the Tribunal under Section 35-P.

Analysis:

Issue 1: Inclusion of the cost of card board cartons in the assessable value of goods
The case involved a dispute regarding the inclusion of the cost of card board cartons in the assessable value of goods manufactured by the respondents. The Assistant Collector initially held that the cost of cartons should be included in the assessable value. However, the Appellate Collector ruled in favor of the respondents, stating that the cartons were durable and returnable containers, making their cost deductible under Section 4(4)(d)(i) of the Act. The Central Government disagreed with this view, arguing that the cartons should not be considered as durable and returnable containers. The respondents acknowledged that while the cartons could be reused, they had no agreement with buyers for their return, thus unable to claim them as returnable. Consequently, the Tribunal upheld the view in the Revision Show Cause Notice, allowing the appeal of the department and rejecting the refund claim of the respondents.

Issue 2: Time bar for Revision Show Cause Notice under Section 36(2)
The respondents contended that the Revision Show Cause Notice was time-barred under the third proviso to Section 36(2). However, the Tribunal disagreed, stating that this proviso applied to cases of short levy, non-levy, or erroneous refund of duty, none of which applied in this case. The order of the Appellate Collector solely concerned the inclusion of carton costs in the assessable value. The Tribunal emphasized that the third proviso was not applicable, as there was no short levy, non-levy, or erroneous refund. Additionally, the Tribunal distinguished the case cited by the respondents, asserting that the facts were different and the cited judgment did not apply to the present case.

Issue 3: Transfer of proceedings from Central Government to the Tribunal under Section 35-P
The respondents argued that proceedings initiated with the Revision Show Cause Notice by the Central Government should not have been transferred to the Tribunal, as they were not pending before the Central Government but with them. The Tribunal rejected this argument, stating that as of 11-10-1982, proceedings were pending with the Central Government and involved a valuation dispute, falling under the jurisdiction transferred to the Tribunal upon its establishment. Therefore, the Tribunal deemed the transfer of proceedings from the Central Government to the Tribunal as valid.

In conclusion, the Tribunal upheld the Revision Show Cause Notice, rejecting the refund claim of the respondents regarding the inclusion of carton costs in the assessable value of goods, and dismissed the arguments related to the time bar and transfer of proceedings.

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