1996 (9) TMI 306 - AT - Central Excise

Tribunal overturns Collector's order on license fee inclusion due to time-barred claim

The Tribunal set aside the Collector's order to include the licence fee in the assessable value determination under Section 4(1)(b) of the Act. The appeal ... Demand - Limitation Issues:Assessable value determination under Section 4(1)(b) of the Central Excises and Salt Act, 1944 for uncompressed Oxygen gas supplied, inclusion of licence fee in declared price, limitation period for adjudication under Section 11A of the Act.Assessable Value Determination:The appeal challenged the Order-in-Original directing the assessable value of uncompressed Oxygen gas to be determined under Section 4(1)(b) of the Act by adding the licence fee to the declared price. The appellants manufactured Oxygen gas and had an agreement with another company for its use. The Collector held that the declared price cannot be considered the normal price under Section 4(1)(b) and valuation should be made under Rule 5 of the Central Excise Valuation Rules, 1975 by adding the licence fee to the declared price. The Collector's order was set aside in appeal, and the case was remanded for reassessment.Limitation Period for Adjudication:The appellant raised arguments on the plea of limitation as well as on merits. The period covered in the order was from November 1977 to June 1983. The show cause notice was issued in 1985, and another notice was issued in 1986 after remand. The issue of limitation was not specifically raised earlier but was raised in the appeal memorandum. The appellants argued that the entire claim under the show cause notice was barred by time as it exceeded the six-month limitation period under Section 11A of the Act. The Departmental Representative claimed a larger limitation period of 5 years due to the alleged suppression of material facts. The Tribunal held that the claim was indeed time-barred as neither notice invoked the extended period of limitation, and thus, the appeal was allowed solely on the limitation issue without delving into the merits.Conclusion:The Tribunal set aside the Collector's order directing the inclusion of the licence fee in the assessable value determination under Section 4(1)(b) of the Act. The appeal was allowed solely on the grounds of the claim being time-barred under Section 11A of the Act, as the notices did not warrant the invocation of the extended limitation period. The Tribunal did not delve into the merits of the case due to the limitation issue.