ORDER
C.N.B. Nair, Member (T)
1. The order impugned in these appeals has demanded a duty of about Rs. 1.53 crores. The demand is with regard to glass sheets cleared by the appellants from their factory for the period July 1977 to June 1980. The order has been passed by the Commissioner on a review of order-in-original C.No. 4-Confl/P&I/80/Pt/I/53 dated 17th June, 1981 of the Assistant Collector. Under the order-in-original, the Assistant Collector of Central Excise, Allahabad has quashed the show cause notice-cum-demand for over Rs. 4 crores issued to the appellants vide show cause notice dated 6-5-1981.
2. The dispute in the present case relates to valuation of sheet glass manufactured by the appellants. They were selling about 5% of the produce ex-factory to several dealers (30) and another about 30%, (1977-78 to 1979-80) to M/s Hindustan Safety Glass Works. The remaining goods which ranged between 50% to 60% were being transported to their depots spread all over the country and were being sold from those depots. The entire produce were being assessed during the relevant period at the ex-factory prices. The price lists on ex-factory basis were also being approved from time to time after the Central Excise authorities being aware of the fact that the depot prices were higher than the prices at the factory level. The Assistant Collector held in the order that where ex-factory prices are available, the assessment to central excise duty was required to be done at those prices and the prices at depot level were not relevant. He also relied on the decision of the Supreme Court in the case of M/s. A.K. Roy v. Voltas ltd. [1977 (1) E.L.T. (J 177) (S.C.)]. The Assistant Collector also had held the demand to be time-barred as full facts of the case were known to the Department and there was no suppression of facts by the assessee, which would justify show cause notice demanding duty for clearance made during the extended period of five years as provided in proviso to Section 11A of the Central Excise Act.
3. The Commissioner has over-turned the order of the Assistant Collector and has held that the depot prices should constitute the assessable value after giving deduction for certain items like transport. The Collector was reaching such a conclusion on a finding that a scrutiny of the balance sheet showed that the appellants were earning considerable profit from their depot sales on account of making addition towards breakage etc.
4. Arguing the appeals, the learned counsel for the appellants submits that the demand raised in the present order is not legal at all inasmuch as it is settled law that once ex-factory prices are available, central excise duty is to be levied on those prices. In cases where goods are sold partly ex-factory and partly from depots, the ex-factory prices should be the basis for assessment of all the goods manufactured and removed from the factory. The learned counsel also submits that the demand in the present case is entirely time-barred. The appellants had been filing price lists from time to time. In fact, some of the price lists filed (6/76 dated 21-4-76) were on the basis that ex-depot price after deduction should be the basis for assessment. However, the Departmental authorities held that in terms of Section 4 of Central Excise Act, valuation of goods for central excise duty should be on ex-factory basis and accordingly, ex-factory prices were approved for charging central excise duty. He, therefore, submitted that the departmental authorities had approved the price lists with the full knowledge about the pattern of sale. Therefore, a finding of suppression of facts has no basis in the facts of this case.
5. We have perused the records and considered the submissions. It is settled law that where ex-factory prices are available, they should constitute the basis for assessment of all the goods to central excise duty. In the instant case, during the relevant period, the appellants were selling a considerable portion of their goods at ex-factory prices to different dealers as well as a major industrial consumer, namely, M/s. Hindustan Safety Glass Works. The prices charged from all the dealers and M/s. Hindustan Safety Glass Works were also the same. In such a situation, the Assistant Collector was right in ordering that the price lists as approved had been correctly approved and the assessable value on ex-factory basis was the correct value for the purpose of levying central excise duty. We also find that the assessee had been filing price lists from time to time including their prices at depots. These prices had been verified by the Central Excise authorities and thereafter, only, the price at ex-factory stage was fixed as the basis for assessment. Therefore, the appellants cannot be charged with suppression of facts either. Accordingly, the demand of duty for the extended period was clearly beyond the provisions of Section 11A.
6. In view of the above discussions, the order has to be set aside on the basis of the demand being time-barred as well as on merits. We do so. The appeal is allowed with consequential relief, if any, to the appellants.
7. In view of the above decision, nothing further remains on the issue raised in appeal No.E/4813/91-A. The order of the Collector remitting the matter to the Assistant Collector for a fresh decision is quashed and the order-in-original confirmed. The price lists as originally approved are confirmed.