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of <h1>Tribunal excludes certain charges from assessable value under Central Excises and Salt Act.</h1> <h3>KASHMIR VANASPATI LTD. Versus COLLECTOR OF CENTRAL EX., CHANDIGARH</h3> KASHMIR VANASPATI LTD. Versus COLLECTOR OF CENTRAL EX., CHANDIGARH - 1996 (81) E.L.T. 66 (Tribunal) Issues Involved:1. Inclusion of additional charges in the assessable value.2. Allegation of suppression or misstatement for extending the time limit for demands beyond six months.Detailed Analysis:Issue 1: Inclusion of Additional Charges in the Assessable ValueFacts and Arguments:- M/s. Kashmir Vanaspati Ltd. charged additional amounts for transport, handling, and local taxes for deliveries within Jammu and Kashmir.- These charges were collected via sale invoices until 15-9-1983 and through debit notes thereafter, which were not included in the RT-12 returns.- The Department argued that these additional charges should be included in the assessable value, leading to the issuance of show cause notices.Legal Provisions and Case Laws:- Section 4 of the Central Excises and Salt Act, 1944 defines the 'normal price' at the factory gate as the basis for assessable value.- The Supreme Court in Voltas Ltd. (1977 (1) E.L.T. (J177)) held that excise duty should be based on manufacturing cost and profit, excluding post-manufacturing expenses like freight and handling charges.- The Tribunal in Indian Oxygen Ltd. (1989 (41) E.L.T. 610) reiterated that the factory gate price should be the basis for assessment.Judgment:- The Tribunal found that the normal price at the factory gate, approved by the Department, should be the assessable value.- Additional charges collected for sales through depots in Jammu and Kashmir are not includible in the assessable value.- The appeals by the assessee were allowed, and the appeals by the Revenue were rejected based on these findings.Issue 2: Allegation of Suppression or MisstatementFacts and Arguments:- The Department alleged suppression or misstatement since the debit notes for additional charges were not included in the RT-12 returns post 15-9-1983.- The assessee argued that there was no suppression or misstatement, as the Central Excise authorities were aware of the additional charges, evidenced by RT-12 returns and a letter dated 21-10-1983.Legal Provisions and Case Laws:- Section 11A of the Central Excises and Salt Act, 1944 allows for an extended time limit for demands in cases of suppression or misstatement.- The assessee cited Indian Oxygen Ltd. (1988 (36) E.L.T. 723) and Voltas Ltd. (1977 (1) E.L.T. (J177)) to support their argument against suppression.Judgment:- The Tribunal did not find it necessary to address the limitation issue in detail, as the decision on the merits rendered the question moot.- The Tribunal concluded that the demand was not justified, thereby making the limitation issue irrelevant.Conclusion:- The four appeals filed by the assessee were allowed, and the two appeals filed by the Department were rejected.- The Tribunal held that additional charges for transport, handling, and local taxes are not includible in the assessable value.- The issue of suppression or misstatement was deemed irrelevant given the decision on the merits.
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