TMI Blog1997 (2) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... nst confirmation of the foregoing duties in showcause notice dated 12/17-4-1984, making the following allegations, so far as the question of limitation of the show-cause notice is concerned. (D) On the point of time limit, it is further said that whereas the assessee claimed approval of a lower value in the price list submitted by them and paid duty of the rate of 50% of the tariff rate applicable from time to time in the statutory records like G.P.s, PLA etc. they had realised a much higher value and the full amount of tariff rate of duty from their customers through their sale bills/invoices which are essentially private records. At no point of time, the assessee made any declaration to the department that they were realising a value higher than the one declared by them in the price lists of/and they were realising a duty higher than the duty actually paid by them. This amounts to `clear case of [suppression] and the provision of the proviso to Section 11A(1) is attracted. Accordingly, the claim and is on there the time limit as stipulated on the statements. Even if it is argued that the sale bills might have been available with the department within a period of 6 (six) mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omers. Appellants were of the opinion that they were entitled to retain the concession under the said Notification. This fact was fully known to the department, avers the Counsel. He draws attention to Superintendent s letter (at page 64 ibid) dated 16-1-1978 which directed the appellants to debit Rs. 3,826.38 in P.L.A. in respect of RT 12 return for month of October 1977. It also directed to arrive at the assessable value correctly in terms of Trade Notice 24/GL-62/1977, dated 29-10-1977 which gave a formula for determination of value where benefit of concession was not passed on to the customers. This was again reiterated by the Superintendent of the Central Excise in his letter dated 23-2-1978 (at page 65 ibid) as also asking for further debits in respect of RT 12 returns for November and December 1977. (b) The appellants, on the other hand, by their letter dated 7-3-1978 (at page 67 ibid) to the Superintendent of Central Excise spelt out their stand that concession was meant to be retained by them. They also rebutted the formula given in the Trade notice dated 29-10-1977 with reference to the scope of Section 4 of the Central Excises Act (CEA) when the Ex-mill (ex-duty price) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposition of penalty. (v) (a) Ld. Counsel has drawn attention to another order involving the period April 1980 to September 1980 (in two showcause notices dated June July 1983) passed by the Assistant Collector on 29-7-1985 (at page 102 ibid) whereby he dropped the demand of duty as barred by time. He made similar observations regarding non-provisional character of the assessments as also on non-sustainability of the allegation of wilful mis-statement or suppression of facts on the basis of correspondence exchanged between the appellants and the department during January to April 1978 and December 1980. (b) In this order, the Assistant Collector has also taken cognizance of an [interim] injunction order dated 12-8-1983 passed by Calcutta High Court (at page 108 ibid) against Assistant Collector s order dated 5-1-1983 confirming demand for the period May 1978 to January 1979 (referred to at para 10 of the appeal memo) stating that the injunction will not apply to manufacture and clearance of the goods in future. As such the contention of the assessee on this count is also not acceptable. 2.3 Ld. Consultant, therefore, submits that the correspondence exchanged between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants vide their letter dated 10-9-1981 (page 122 ibid) inter alia, in the following manner :- Since our ex-mill price is more than the certified rates on the basis of manufacturing cost plus manufacturing profits but lower than the total cost, the difference between (a) the ex-mill price plus excise on the same minus credit charges, and (b) the certified manufacturing cost plus manufacturing profit plus excise duty and excise cess on the same, is separately shown as `part of post and non-manufacturing expenses and contract rate consideration, if any : In this connection, we would request you to kindly check up our all the bills from which it will be very clear to you as to how we are raising the bills on our customers, agents and dealers. (e) Appellants vide their letter dated 24-12-1981 (Page 124 ibid) file another price list on the same basis - `manufacturing cost plus manufacturing profit - based on audited accounts for the year ending 30th June, 1981. (f) Superintendent of Central Excise, Audit Unit No. 5 Cal. XIV Division, inter alia, comments and points out certain discrepancies in the declaration of `manufacturing cost submitted by the appellants after examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. JDR further submits that the impugned order sustains the demand not merely on the finding of suppression of fact, as stated above, but also on a finding that assessments are to be held provisional. In this connection, he draws attention to the following finding on internal page 7-8 of the impugned order : In respect of the appellant s contention on assessment and clearance of goods it is seen that the Assistant Collector of Central Excise, Calcutta - XIV Division vide his letter C. No. V/17/D/9/82, dated 9-3-1982 informed the assessee to execute an additional bond with sufficient security to cover differential duties involved. In the above situation clearance of goods on submissions of price list pending approval is covered under Rule 173C(5) and assessments are to be held provisionally. 3.3 Apart from the foregoing plea on facts regarding provisionality of assessments pending approval of price list, ld. JDR invites attention to Apex Court s judgment in the case of Samrat International (P) Ltd. v. Collector of Central Excise reported in 1992 (58) E.L.T. 561 (S.C.) wherein it has been held that clearances of excisable goods pending approval of classification list and price- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sments is beyond the impugned show cause notice and should, therefore, be considered as being of no effect. 4.2 He, further points out that Collector s finding on provisional assessments is based on some purported letter dated 9-3-1982 from the Assistant Collector to the appellants. Their categorical stand in para 36 of the appeal memo is that they do not have any record of having received the said letter. In the circumstances, the appellants requested vide their letter dated 28/2-11/12-1988 to grant a certified copy of the said letter and they also deposited the requisite charges for getting certified copy. Collector s office informed vide their letter dated 8-12-1988 that the alleged letter of the Assistant Collector was not available in that office and that the appellants should contact the Assistant Collector. Accordingly, on 13-12-1988 they addressed a letter to the Assistant Collector to issue a certified copy of his letter dated 9-3-1982 addressed to the appellants. Till now, the said certified copy of the said letter has not been received, urges the Counsel. It has also been urged in ground `T of the appeal memo, as pointed out by the ld. consultant, that no reliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assessment. No adjustment of duty on so-called final assessment has taken place in this case consequent to assessment of RT 12 returns for the relevant period. He, therefore, submits that Samrat International (supra) is not at all applicable to the facts and circumstances of this case. 5.1 Appeal No. E(SB)-539/86A, involving only the approval of prices in two price-lists effective during the period 1-2-1981 to March 1983, was not pressed by the appellants consultant at the commencement of the arguments on the date of hearing of these appeals. The said appeal is, therefore dismissed as not pressed and a separate order has been passed. 5.2 Other appeal viz. E(SB)-553/88A before us involve a demand of duty of Rs. 35,41,801.65 on clearance of paper (M.G. Kraft paper) during the period 1st February, 1981 to March 1983 vide show cause notice dated 12/17-4-1984 issued by the Revenue. Appellants ld. consultant has vehemently urged on the strength of evidence on record, brought out earlier, that the allegation of wilful suppression of facts in the said show cause notice as also the finding of the adjudicating authority is at once unsustainable. Consequently, larger time limit of five ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, and yet they did not take any action. They just let the matter drift as if it was nobody s concern. They issued the show cause notice too late for recovering the same. Allegation of suppression of facts on the part of the appellants as made in the show-cause notice dated 12/17-4-1984 and sustained in the impugned order does not hold at all in the face of evidence brought on record. We do not agree with the ld. JDR, Shri S.N. Ghosh that the evidence on record prior to the relevant period is not material in this case. The evidence brings on record the persistent legal stand of the appellants on the issue of valuation of goods where concession in excise duty is retained by them and the department s full knowledge about the same. Findings of the adjudicating authorities, though at later dates, pinpoint the facts that the appellants have disclosed everything what they were required to do. But the concerned authorities did not safeguard the revenue. 5.4 We have to further observe that we are unable to understand the department s inaction or apathy, at least on the issue of realisation of higher duty than that paid by the appellants after amendment of Section 4 by Finance Act 1982 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational (supra). According to him ratio of the said judgment is that clearances of excisable goods pending approval of the classification list or price list are provisional as held by the Court. Therefore, limitation for a refund claim under Section 11B will count from the date of adjustment of duty on final assessment. By parity of reasoning, he submits that the said ratio applies to a case of demand of duty under Section 11A. Ld. consultant on the other hand submits that the ratio of Samrat International should be understood in the context of the facts and circumstances of that case. Section 11A has not even been noticed by the Court in the said judgment. To extend the ratio of that judgment to a case of demand of duty under Section 11A would not be correct. Some of the observation made by the court are peculiar to the facts of a refund case and not to case of demand of duty. (b) On a careful reading of the said judgment, we observe that followings are the relevant facts in that case which led the Court to observe in para 9 of the said report (already extracted above in para 3.3 above) :- (i) The appellants therein (Samrat International) filed a classification list under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the result of final approval by the officer is based on the reason given in the subsequent sentence at (iii). This reasoning, we observe, is peculiar to a situation, when excess payment is being made on provisional basis and the final approval results in lower amount of duty. In that situation alone, balance in the P.L.A. would be sufficient to cover the amount of duty that may be demanded on the goods intended to be removed at any time. In the other words, no bond is necessary because provisional payment of duty is at a higher level than the final approval in cases where refund is involved on final assessment. This was precisely the factual situation in Samrat International because provisional payment was at the rate of 15% whereas the correct rate of duty was lower (i.e. nil or 3.75%). The observation of the Apex Court at Sl. No. (iii) above will not fit in with a situation where on final assessment, a demand of duty from the assessee is involved. It will happen quite often that balance in P.L.A. may be just sufficient to cover the lower amount of duty being paid provisionally (pending approval of classification list/price list) and not the higher amount of duty that may be d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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