1. By his impugned Order dated 15-1-1981, the Appellate Collector allowed 3 appeals (Nos. 2383/79, 1281/80 and 352/80) in full. Appeal No. 2~343/79 was only partially allowed. The remaining two appeals 2437/79 and 2407/79 were rejected.
2. M/s. Ajanta Paper & General Products, (the appellants before us), filed a single revision application against the Order-in-Appeal passed by the Appellate Collector. On the setting up of this Tribunal, the revision was transferred to the Tribunal under Section 35-P of the Central Excises and Salt Act to be disposed of as if it were an appeal filed before it. In accordance with the practice and requirement of the Tribunal, the appellants filed 5 supplementary appeals since, in the first instance only one revision application had been filed though there were six appeals before the lower authorities.
3. When the matter was taken up for hearing on 17-4-1985, Shri S.P.Kampani, Consultant for the appellants stated that the first group of appeal (Nos. 442/81-C, 1404/84-C and 1405/84-C) were filed under a misapprehension. Since the Appellate Collector had extended full relief in so far as the three appeals before him relating to these matters, nothing survived to be brought up before this Tribunal by way of appeal. He, therefore, requested for leave to withdraw these three appeals. Shri A.S. Sundar Rajan, Departmental Representative, however, opposed the prayer and stated that the Department had a right to file cross-objections and the prescribed period of 45 days for this purpose had not still run out. He further stated that the appeals have been filed, the Tribunal was bound to give a decision thereon despite the appellant's prayer for withdrawing them.
4. We have considered the Departmental Representative's objection and find no substance in it. It is apparent from the record that as early as on 4-8-1984 the Registry of the Tribunal had given notice to the Departmental Representative about the filing of the appeals. Shri Sundar Rajan admitted before us that the S.D.R.'s office had received the appeals. The question of 45 days, if at all, could arise only from this date and the prescribed period for filing cross-objections has long since expired. This is quite apart from the fact that, as held by the Tribunal in Associated Capsules Pvt. Ltd. v. Collector of Customs, Bombay-1983, E.L.T. 809, the respondent has no right to file cross-objections in transferred proceedings such as the present one. We do not also accept the other contention that we are bound to give decisions on these appeals despite the fact that the Appellants themselves seek to withdraw the appeals. As observed earlier, the Appellate Collector had given full relief to the appellants and, therefore, nothing survives for our consideration. Had the department taken up the Appellate Collector's Order for review proceedings to be initiated by the Central Government in exercise of its powers the situation could have been different. Such proceedings not having been initiated, what remains before us is only the appeals filed by the appellants. Since the relief they seek in these appeals has already been granted to them by the Appellate Collector, we have nothing to consider and decide upon. In the circumstances, we allow Shri Kampani's prayer and allow these three appeals to be withdrawn.
5. The point which arises for our determination in the II group of appeals is whether, in arriving at the assessable value of excisable goods, the amount of duty to be deducted from the normal price in terms of Section 4 of the Central Excises and Salt Act is the one computed at the effective rate of duty, that is to say, the rate specified in the First Schedule to the Central Excises and Salt Act read with any exemption notification issued under Central Excise Rule 8(1) or the duty computed without taking into account any relevant exemption notification. In the present cases, the appellants were availing themselves of the benefit of the concessional rate of duty provided in Central Excise Notification No. 128/77 which reduced the duty payable on paper subject to certain conditions one of them being the installed capacity of the paper mill. It appears that the appellants charged and collected from their customers amounts purporting to represent duty calculated without taking the exemption into account but were paying to the Central Excise Department only duty computed taking into account the exemption. In arriving at the assessable value, the appellants contended that the former amount was deductible whereas the department said that only the latter amount was deductible. The Appellate Collector, in his impugned order, held that in terms of Section 4 of the Central Excises and Salt Act, the action of the department was correct. As regards the plea that the demand notices were hit by limitation, the Appellate Collector observed that even though the monthly returns in form RT-12 for the relevant period had been finalised by the department without raising any objection, the appellants were not absolved from their liability to inform the department that though they were collecting full duty from the customers, they were paying to the department only concessional duty.
This fact came to the notice of the department only when officers scrutinised the invoices. Consequently, the Appellate Collector held that there was suppression of material facts on the part of the appellants and, therefore, the extended period of 5 years would be applicable to the show cause notices in two appeals before him, namely, 2437/79 and 2407/79. In the result, he held that relief prayed for in these two appeals as well as in appeal No. 2343/79 in so far as it related to the very same issue was not admissible. It is this order, which is now under challenge before us.
6. Shri S.P. Kampani, learned Consultant, appearing for the appellants, stated that the show cause notices numbering 5 pertaining to these three appeals were partly hit by limitation i.e., to the extent they covered periods extending beyond six months from the dates of payment of duty. In the instant cases, the assessment returns were scrutinised and finalised by the proper officer and there was no question of any suppression of facts on the part of the appellants, Hence, only the normal period of 6 months would be available to the department. Next, he submitted that though Section 4 was amended in 1982 with retrospective effect in such a way that the dispute about the computation of assessable value stood determined against the appellants, the Appellate Collector should have followed the law laid down by the Courts of law on the interpretation of Section 4 which were valid when he decided the appeals. According to judicial decisions, it was open to the appellants to retain with them the quantum of the duty exemption and not pass it on to their customers and this would not involve any necessity to redetermine the assessable value of the goods as contended by the department.
7. Opposing the appeals, Shri Sundar Rajan, Departmental Representative drew our attention to the Tribunal's decision on the issue of computation of assessable value in a similar situation in Polyformalin (Pvt.) Ltd., Cochin v. Collector of Central Excise, Cochin, 1985-ECR-35. The present appeals deserved to be rejected following that decision. As regards the plea of time bar Shri Sundar Rajan submitted that, for the reasons spelt out by the Appellate Collector, the extended period of 5 years would be available to the department.
8. We have carefully considered the submissions of both sides. The issue regarding determination of the assessable value in situations similar to the one encountered in the present cases has come up for our consideration on several decisions. We need cite only one of our decisions. In the Polyformalin case, we have held that unless a given element in the normal sale price of goods is shown to be one deductible for the purpose of arriving at the assessable value in terms of Section 4 of the Central Excises and Salt Act, 1944, in the light of the Supreme Court's judgment in Union of India and Ors. v. Bombay Tyres International Ltd. and Ors.-1983 ELT 1896 (S.C.)-1983 ECR-1627D-SC, that element will not be deductible. In the present cases, this element represents a certain sum of money which, in law, did not constitute duty. Nor has it been shown as deductible on any other account. Hence, it is not deductible. Once this position is reached, it is easy to see that the action of the lower authorities was correct and must be upheld.9. Turning to the plea of limitation, it is not in dispute that returns in form RT-12 for the relevant months had been finalised by the proper officer without raising any objection. The ground on which the demands have been raised is that appellants had paid duty at the concessional rate under Notification No. 128/77 while clearing the goods from the factory on gate passes. Subsequent verification of invoices showed that the appellants had recovered the full amount of duty payable at the tariff rate without the benefit of the duty concession. It cannot, therefore, be said that the show cause notice did not lay any foundation for invoking the extended period of 5 years for demanding the short-levied duty. However, the records before us do not throw any light on the question whether, in the given case, there was sufficient material to come to a conclusion that there had been suppression of facts. The Appellate Collector says that since the short-levy was detected only consequent to scrutiny of the sales-invoices, there was suppression of the material fact that the appellants collected from the customers duty at the tariff rate whereas they had paid to the Department duty duly at the concessional rate. It is, however, the appellants' contention that they had made no secret of their having retained the benefit of the duty concession. They say that the Range Supdt. is supposed to have verified the invoices at the time of assessing the RT-12 returns. The actual position would have been evident from their invoices which were scrutinised by the Supdt. at the time of checking the RT-12 returns. Whether the appellants had, in fact, made available invoices along with the RT-12 returns is not clear. If, in fact, they had, they would be justified in their stand.
The Price Lists covering the subject goods during the relevant period would also have helped to throw some light on the question. But these are not before us. Given this position, we think the best course, in the interests of justice, would be to set aside that part of the impugned order relating to the II group of appeals in so far as it relates to actual duty liability consequent on redetermination of assessable value. We order accordingly and direct the Collector (Appeals) to determine the issue of limitation and duty liability afresh after affording the appellants a reasonable opportunity to put forth their case. Since the matters are pretty old, the Collector (Appeals) shall endeavour to dispose them of within 3 months from the date of communication of this order.
10. The appeals are disposed of with the above observations and directions.