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1993 (7) TMI 198
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....on filed under Notification No. 111/78-C.E., dated 9-5-1978, the total value of all the excisable goods cleared by them in the financial year 1980-81 were Rs. 2009379, and thus had exceeded Rs. 20 lakhs they were not entitled, during the year 1981-82, for any exemption as per para 2(i) of the Notification No. 80/80-C.E., dated 19-6-1980 (as amended). 3. Accordingly, it was alleged that the party had removed without payment of Central Excise duty, excisable as under :- (1) The value of the goods falling under Item No. 45 of the Tariff and exceeded the exemption limit of Rs. 5 lakhs during the year 1980-81, and the party was liable to pay excise duty on the goods valued at Rs. 101150, cleared by them during that year 1980-81, after crossing the exemption limit of Rs. 5 lakhs. (2) During the year 1981-82 they were liable to pay excise duty on the goods falling under Item No. 45 of the Tariff, valued at Rs. 64300/-, as they were not entitled for any exemption in terms of para 2(i) of the Notification No. 80/80-C.E., dated 19-6-1980 (as amended). 4.The case was adjudicated by the Additional Collector, Central Excise, Meerut, vide Order-in-Original No. 18-Additional/Coll....
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....on, they were advised that they could claim deductions from such total money receipts. As per the declaration, they had exceeded the eligibility limit marginally. (ii) Admissible deductions have been disallowed by the Additional Collector, Central Excise. Even trading activities have been taken as manufacturing activities. (iii)Clearances under Item No. 45 and Item No. 68 of the Tariff could not have been clubbed together. (iv) Exempted goods were also included in the aggregate value of clearances. The parts of weigh bridges were exempt but the same were also included for arriving at their duty liability. (v) Seizure of goods was not warranted, in the circumstances of the case. Additional Collector has stated nothing in his Order about the seized goods. (vi)They had no intention to evade payment of duty. (vii)The case is very old and more than 10 years have passed from the date of issue of Show Cause Notice. 12.In support of the points made by him, he relied upon the following decisions :- (1)1989 (43) E.L.T. 195 (SC) = 1989 (25) ECR 289; (2)1993 (65) E.L.T. 121 (Tri.) = 1993 (44) ECR 554. 13. Smt. C.G. Lal, the learned SDR referred....
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....the arguments advanced on both the sides. 20. Under letter dated 18-4-1981, M/s. Kapoor Engg. Works made a declaration under Notification No. 111/78-C.E., dated 9-5-1978, which was issued under Rule 174A of the Rules. It was provided under that Notification No. 111/78-C.E. that exemption from the operation of Rule 174 of the rules, was subject to the condition, among others, that the manufacturer makes a declaration and gives an undertaking as specified in the format annexed to that notification, while claiming exemption for the first time under that notification, and, thereafter before the 15th day of April of each financial year. 21. The declaration for the year 1980-81 appears to have been filed on 19-6-1980, and for the year 1981-82, on 18-4-1981. Thus, it appears that the declarations were filed after the prescribed dates. 22. As per declaration for the year 1981-82, the aggregate value of their clearances of excisable goods, taken together, falling under Item No. 45 and Item No. 68, during the year 1980-81, had exceeded Rs. 20 lakhs. At the same time, clearances of the excisable goods under Item No. 45 alone during the year 1980-81, had exceeded the aggregate va....
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....s during the year 1980-81. They also did not pay duty in respect of the goods falling under Item No. 45 cleared during the year 1981-82. They did not pay duty in respect of such clearances although they were not entitled for such exemption, and were obliged to apply for proper Central Excise licence and to pay appropriate duty, in terms of the very exemption from the licensing provision, they had claimed. 28. The declaration under Notification No. 111/78-C.E. related to the exemption from the operation of the licensing provisions under Rule 174 of the rules. In no way it provided exemption from payment of Central Excise duty. It was incumbent upon the manufacturer not only to obtain a proper licence as soon as they reached 80% of the exemption limit but also to observe all necessary formalities and to pay appropriate Central Excise duty once the exemption limit was crossed, in terms of the conditions as stipulated in that notification. 29. In their reply to the Show Cause Notice they claimed deductions from the aggregate value of clearances on account of packing and handling charges, supervision/erection charges, trading, exempted goods, bills cancelled and repairin....
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....ication that where the parts of weigh bridges were produced elsewhere than in the factory of production of such weigh bridges, the procedure laid down in Rule 56A of the Central Excise Rules, 1944, were followed. 37. Although the notification is not happily worded, it is clear that parts of weigh bridges when sold as such were not entitled for exemption. It is clear from the proviso in the notification that when the parts of weigh bridges were not produced in the factory of production of weigh bridges then such parts will be received only on payment of duty. In the factory of production of weigh bridges the proforma credit will be allowed in respect of the duty paid on the parts of weigh bridge. Thus, there was no exemption to parts of weigh bridges if they were cleared as such; but only when they were used in the production of weigh bridges, in the factory of production, exemption was granted. If cleared as such proper duty was payable, and when used elsewhere in the production of weigh bridges, duty already paid on the part was eligible for proforma credit at the stage of the clearance of weigh bridges. 38. Any other interpretation to this notification will create....
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....taxation that the exemption under Notification No. 310/77-C.E. was provided so that duty is not charged twice once on the parts of weigh-bridges and again on weigh-bridges in the production of which, such parts have been used for the same reason when parts of weigh-bridges are received from outside after discharging their duty liability the proforma credit procedure was applied so that duty credit in respect of the duty paid on the parts, was provided when weigh-bridges were cleared on payment of duty. 44. As regards the contention that the expression "all excisable goods" would not include the goods which were exempt from levy of excise duty by virtue of a notification, issued under Rule 8 of the Rules, and that the goods exempted under Item No. 45 or Item No. 68 from levy of duty of excise, were not excisable goods, reference may be made to the definition of "excisable goods" under Section 2(d) of the Act. `Excisable goods' means the goods specified in the Central Excise Tariff as being subject to a duty of excise. Even after unconditional exemption they do not cease to be specified in the Tariff. They do not become unspecified goods. In the present case even the exemptio....
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....t tenable because the words used in the proviso were "total value of all excisable goods", and not the "total value of said goods", the said goods being the goods falling under Item No. 68 of the Tariff. The Tribunal held that the appellants in that case were not entitled to exemption under Notification No. 176/77-C.E. 49. In the case - Chemicals of India v. Collector, Central Excise, 1990 (45) E.L.T. 450 (Tribunal), the Tribunal had held that the excisable goods do not become non excisable even if fully exempted from duty under a notification. In that case the manufacturer manufactured excisable goods specified in the Notification No. 80/80-C.E., dated 19-6-1980. They also manufactured Thinner falling under Item No. 68 of the Tariff which were exempted from the whole of excise duty, under Notification No. 179/77-C.E. The Tribunal held that the value of Thinner was correctly included in the computation of total value of clearances of all excisable goods during the previous financial year, and as the total value of clearances of all excisable goods including value of Thinner exceeded Rs. 20 lakhs in the previous financial year the benefit of exemption under Notification No. ....
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....the price at which the goods are sold does not include the value then it must be so included by the very force of the terms of the Section." 55. The Tribunal in the case - AIMS Oxygen Pvt. Ltd., v. Collector, Central Excise, 1988 (36) E.L.T. 151 (Tribunal), had observed that the handling charges incurred upto the factory gate stage would be includible in the assessable value. 56. They also added that the loading charges incurred in the factory before the clearance of the goods are to be included in the assessable value in the light of the Hon'ble Supreme Court judgment in the case - Union of India v. Bombay Tyre International Ltd., reported in 1983 (14) E.L.T. 1986, and Assistant Collector, Central Excise v. MRF Ltd., reported in 1987 (27) E.L.T. 553 (SC). 57. Similar observations were made by the Tribunal in the case of Collector, Central Excise v. Indian Oxygen Ltd., 1989 (41) E.L.T. 610 (Tribunal). It was observed that "in so far as delivery and handling charges ex-factory are concerned, these must constitute a part of the assessable value itself as they make up the price of the goods, ex-factory. Such charges, therefore, will have to be added to the pric....
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....he case - Collector, Central Excise, Bangalore v. Sunray Computers Pvt. Ltd., 1988 (33) E.L.T. 787 (Tribunal), the Tribunal had observed that "if there is a single contract for supply of the goods as well as services, care may have to be taken to see that there is no attempt at diverting a part of the true price of the goods to service charges." 66. In the case before us, no copy of any contract has been filed. 67. As regards the cancelled bills, the demands were raised on the basis of party's declaration. The figures of manufacture/sale given by the party were adopted for the purpose of raising demands. There was no mention of any cancelled bills thereon. The Additional Collector, Central Excise, Meerut had come to a finding that in any case, the bills were not cancelled during the year 1980-81, and if any bills were cancelled during 1981-82 their effect will have only on the subsequent years 1982-83 onwards which period is not before us for our consideration. 68. Further, no evidence has been produced that the goods covered by the bills as originally issued were not removed from the factory. The party had failed to fulfil their obligations with regard to mainte....
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....n in that case has any relevancy to the facts before us. 75. In the case - Priya Pharmaceutical Works v. Collector, Central Excise, Meerut, 1985 (19) E.L.T. 272 (Tribunal), the Tribunal had noted about limitation that "to have all details of clearances, production etc. etc., is not the same thing as having a sheet or a statement or a declaration for a particular purpose designed to meet that one purpose." 76. In the case before us the declaration was filed by the appellant on 18-4-1981, and the Show Cause Notice was issued on 5-10-1981. We consider that it was issued within time. 77. It has been laid down in N.S. Metal Industries v. Union of India [77 TLR (NOC) 31] that when no licence is obtained for the manufacture of excisable goods and removal is effected without payment of duty, Rule 9(2) is attracted. 78. The Bombay High Court in the case of Devi Dayal Rolling and Refineries Pvt. Ltd. v. Superintendent, Central Excise and Others, 1983 (12) E.L.T. 338 (Bom.) had also held that if there was no assessment, Rule 9(2) will apply. 79. In the case - Collector, Central Excise, Hyderabad v. Chemphar Drugs and Liniments, Hyderabad, 1989 (40) E.L.....