1987 (11) TMI 203 - AT - Central Excise

Court Upholds Excise Duty, Reverses Discounts Decision

The court confirmed demands for additional excise duty on samples due to lack of supporting documentation but overturned demands related to denial of ... Approval Of without hearing or Show Cause Notice Issues:- Differential Central Excise duty demands on RT-12 assessment returns for specific periods.- Exemption from additional Central Excise duty on samples denied.- Denial of 6-1/4% discount for 'B' Grade fabrics.- Denial of cash discount.Analysis:The judgment pertains to 8 appeals with a common issue involving the same appellants and was argued collectively. The appellants, who manufacture man-made fabrics, contested demands for differential Central Excise duty on their RT-12 assessment returns for the period between February 1976 and January 1977. The demands were raised due to denial of exemption from additional Central Excise duty on samples, denial of 6-1/4% discount for 'B' Grade fabrics, and denial of cash discount.Regarding the exemption from additional duty on samples, the appellants failed to provide the necessary documentation to support their claim. The notification granting the exemption was prospective, and the appellants were unable to demonstrate entitlement to the exemption for the period before the specified date. Consequently, the demands related to this exemption were upheld.Concerning the denial of the 6-1/4% discount for 'B' Grade fabrics and cash discount, the appellants presented price lists and orders issued by the Assistant Collector. The Assistant Collector's orders on the price lists were challenged by the appellants, leading to delays in receiving orders from the Appellate Collector. Despite identical orders being issued on subsequent price lists, the appellants did not file separate appeals assuming repetitive appeals were unnecessary. However, as they continued to deduct the discount, demands were raised on the RT-12 returns, prompting the appellants to file appeals against these demands.During the proceedings, the appellants argued that the price approvals and demands were made without adhering to the principles of natural justice. The department's representative contended that the Superintendent's role in assessing the RT-12 returns was limited to verifying compliance with approved rates and values. The Appellate Collector had vacated the initial order of the Assistant Collector and directed a reevaluation with proper hearing. As subsequent price approvals suffered from the same procedural flaw, the demands related to the discounts were set aside, and the Assistant Collector was instructed to reassess the admissibility of the discounts.In conclusion, the demands concerning additional excise duty on samples were confirmed, while those linked to the denial of discounts were overturned. The Assistant Collector was directed to issue fresh orders on the eligibility of the discounts and the validity of the associated demands. All 8 appeals were resolved accordingly.