2007 (6) TMI 443 - AT - Central Excise

Tribunal rules in favor of appellant, setting aside cost inclusion order, allowing appeal on time-barred grounds.

The Tribunal ruled in favor of the appellant, setting aside the order to include the cost of corrugated boxes in the assessable value and allowing the ... Demand - Limitation - Extended period - Suppression - Valuation Issues:1. Inclusion of cost of corrugated boxes in the assessable value of goods cleared.2. Time bar on the demand for excise duty.Analysis:1. Inclusion of cost of corrugated boxes in the assessable value of goods cleared:The appeal was filed against the Order-in-Appeal regarding the inclusion of the cost of corrugated boxes in the assessable value of goods cleared by the appellant. The appellant manufactured plastic tubs and supplied them to a company along with corrugated boxes provided by another company. The lower authority held that the cost of the corrugated boxes should be included in the assessable value. The Adjudicating Authority relied on a Board's Circular and imposed a demand under Section 11A of the Central Excise Act along with interest and penalty. The Commissioner (Appeals) upheld this decision. The appellant argued that the cost of the boxes should not be included, and the demand was time-barred. The Tribunal found that there was no revenue loss to the exchequer as the jurisdictional officer was informed about the practice, and the appellant's client had given an undertaking regarding the use of the boxes. The Tribunal set aside the impugned order due to the time bar.2. Time bar on the demand for excise duty:The appellant contended that besides the merits of the case, the demand was time-barred. They pointed out that the supply of corrugated boxes was known to the authorities since 2001, and there was no suppression of facts. The Show Cause Notice was issued in 2004 for the period from 2001 to 2002. The appellant argued that the longer period could not be invoked due to the lack of suppression of facts. The Tribunal agreed with the appellant, stating that the Show Cause Notice was not issued in a timely manner, and there was no material to support the charge of suppression of facts. Therefore, the impugned order was set aside on the grounds of being time-barred, and the appeal was allowed.In conclusion, the Tribunal ruled in favor of the appellant, setting aside the order to include the cost of corrugated boxes in the assessable value and allowing the appeal on the grounds of being time-barred.