1998 (5) TMI 86 - AT - Central Excise

Tribunal Upholds Order, Remands for Fresh Decision

The Tribunal declined to set aside the order on the ground of delay, emphasizing that delays must be assessed on a case-by-case basis. Regarding the show ... Adjudication - Long delay - Demand - Limitation Issues Involved:1. Sustainability of the order due to delay.2. Show cause notices being barred by time.3. Merits of the case regarding suppression of facts and valuation of goods.Issue-wise Detailed Analysis:1. Sustainability of the Order Due to Delay:The appellant contended that the impugned order, passed after a delay of nine to ten years from the issuance of show cause notices, is unsustainable. The appellant relied on several decisions, including the Government of India's decision in M/s. Girwar (1982 (10) E.L.T. 563) and the High Court of Bombay's decisions in Universal Generics Pvt. Ltd. (1993 (68) E.L.T. 27) and Nehawa Steel Traders (1993 (68) E.L.T. 721), which highlighted that long delays in adjudication deprived the assessee of the opportunity to explain their position properly. However, the Tribunal noted that the Central Excise Act does not impose any time limit for concluding adjudication proceedings. It emphasized that the delay must be assessed on a case-by-case basis, considering factors such as the load of work on the adjudicating authority and the degree of cooperation from the assessee. The Tribunal concluded that long delays could lead to a violation of natural justice if they deprived the assessee of the ability to marshal documents or witnesses. However, in this case, the appellant failed to demonstrate that the delay prejudiced their ability to explain their case. Therefore, the Tribunal declined to set aside the order on the ground of delay.2. Show Cause Notices Being Barred by Time:The appellant argued that the show cause notices were barred by time, asserting that there was no deliberate suppression of facts or intent to evade duty. The Tribunal examined the allegation that the appellant did not declare the prices of comparable goods purchased from the market while seeking approval of the price lists for captively consumed waxed paper. The appellant's defense relied on the decision in Rasan Detergents (1991 (51) E.L.T. 391), which held that the absence of a definition for 'comparable goods' meant the assessee could not be expected to know about the comparability of goods. However, the Tribunal distinguished the present case, noting that the appellant purchased waxed wrapping paper from other manufacturers and was aware of its nature and quality. Consequently, the Tribunal agreed with the adjudicating authority that the entry 'N.A.' in the price lists against comparable goods was not properly explained and could amount to deliberate suppression of facts. The Tribunal also noted that the appellant's letter dated 17-11-1978 seeking relaxation of Rule 51A and the Collector's letter dated 29-11-1979 granting such relaxation were not considered in the impugned order. The Tribunal remanded the case to the adjudicating authority to reconsider the question of the bar of limitation after obtaining copies of these documents.3. Merits of the Case Regarding Suppression of Facts and Valuation of Goods:The appellant contended that there was no suppression of facts as they sought permission for relaxation of Rule 51A in 1978, which was granted by the Collector in 1979. The Tribunal noted that the adjudicating authority should have considered the appellant's letters seeking relaxation and the Collector's response before deciding on the bar of limitation. Additionally, the Tribunal emphasized that even when the value of similar or comparable goods is available, the adjudicating authority must consider adjustments in light of the proviso to Rule 6(b)(i) of the Valuation Rules. The appellant argued that differences in the type and size of manufacturing units should be taken into account. The Tribunal agreed that the adjudicating authority should consider whether and to what extent such differences affect the value and make due adjustments accordingly.Conclusion:The Tribunal set aside the impugned order and remanded the case to the jurisdictional adjudicating authority for a fresh order in accordance with the law and the observations made in this judgment. The adjudicating authority was directed to provide the appellant with an opportunity for a personal hearing. The appeal was allowed.