TaxTMI 
TaxTMI 
TaxTMI 
1987 (2) TMI 517
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....uses in a contract for construction and delivery of ships, partake of the character of "price" and hence form part of the assessable value? (c) Whether, on its terms, the notice to show cause dated 19-2-1981 enables resort to the larger period of Limitation (five years) in terms of the proviso to Section 11 A of the Act? (d) If not, whether the claim for payment of additional duty in terms of the aforesaid notice to show cause was illegal, without jurisdiction or otherwise barred by limitation? Or violative of the principles of natural justice. (e) Is the appellant precluded from contending in this second appeal that the aforesaid notice was either without jurisdiction or barred by limitation, or violative of the principles of natural justice not having raised such pleas initially in the reply to the show cause notice or the grounds of appeal before the Collector (Appeals)? 2. The short facts relevant are :'- (a) pursuant to a ship building contract for the construction and delivery of two ships with the India Steam Ship Company Ltd., dated 18th August, 1975, the appellant was, originally, paid a price of ₹ 28,88,11,152.52 on which Central E....
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....ment or suppression of facts or contravention of any of the provisions of the Act or of the Rules with intent to evade payment of duty. Without any allegation to that effect in the notice, there is no initial jurisdiction to raise a demand beyond six months; (e) it was incumbent on the part of the Revenue to make out a case in the notice for claiming the enlarged period of limitation and if this was not done and established in the course of the proceedings the Revenue could not have availed themselves of the enlarged period of limitation. The failure to make the requisite allegations (in the notice) to attract the larger period of limitation results in a denial of opportunity to show cause and thus violative of the principles of natural justice. The Revenue cannot now make out a new case for attracting the larger period of limitation; (f) in any event, the demand for the payment of the escalated amount of ₹ 40,17,880.55 for both the ships is not yet realised as it is the subject matter of disputes pending in arbitration between the appellant and their buyers. 4. The learned Departmental Representative generally defended the orders below. 5. It would appear t....
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....o be fixed by a third party; (ii) in the contracts, presently before us in the Appeal, it would appear that :- (a) the price payable was to be determined on the basis of "valuation of international price to be obtained and according to and in terms of other conditions forming part of the pricing formula evolved by the Government of India and indicated to the builders in their letter No. SY-VI(2)/70, dated 22nd July, 1971 and subject to such revision and modifications in this formula as may be made by the Government of India". In other words, a method of the fixation of price as laid down in the contract itself; and (b) the price so fixed is further subject to reimbursement of extra expenditure on account of variation in the value of Indian rupee or any other currency in statutory levies applicable to the contract; (iii) in the first blush, the stipulations in relation to escalation in the price of steel or labour or customs duty on imported parts in the contract may appear to partake of the character of reimbursement of actual expenditure incurred on account of statutory levies. But then, are they, truly, reimbursement of additional expenditure incurred ....
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.... the retail price of the cars at ₹ 13,434/- per car, the aforesaid company filed a Writ Petition in the Supreme Court impugning the fixation of such a price; (c) the company informed its dealers that the price in their bills at the rates specified in the impugned Price Control Order was provisional and is subject to alteration in the event of the company succeeding in the Supreme Court. This was incorporated in their invoices as well; (d) in the price-list filed by the company before the Central Excise authorities, the controlled price of ₹ 13,434/- was shown. It was accepted as the assessable value and Excise Duty paid accordingly. Although the Excise authorities were aware that the price was provisional, they did not make a provisional assessment. It was a final assessment made by them on the price declared; (e) in the Writ Petition, the Supreme Court was pleased to determine the price of cars sold between 2nd September, 1969 and 31st June, 1970 as well as those sold between 1st July, 1970 and 15th April, 1971. As a result of such fixation, the company was entitled to recover ₹ 334/- per car and ₹ 1,353/- per car respectively sold duri....