ORDER
V.P. Gulati, Member (T)
1. This is a revision petition filed before the Central Government and which stands transferred to this Tribunal to be disposed of as if it were presented before the Tribunal as an appeal.
2. The appeal is against the order of the Appellate Collector, Central Excise, Calcutta, who has upheld the order of the lower authority regarding determination of the assessable value but modified the same by holding that the demand may be raised for one year from the date of the issue of the show cause notice and not for the extended period for which the demand was earlier confirmed in terms of the Assistant Collector's order. 3. The brief facts of the case are that the appellants were manufacturing U.F. resin and were consuming it captively. They had filed a price list No. 1/1974 for the year 1974 on the basis of the costing of 1973 and the assessable value for 1974 was approved by the Jurisdic-tional Superintendent of Central Excise @ Rs. 2.73 per kg., that is, by taking the cost @ Rs 2.48 + 10% profit. Before this price list was approved, the appellants were asked by the Jurisdictional Superintendent vide his letter dated 23.8.1974 to furnish fresh costing data duly certified by a Chartered Accountant alongwith the latest margin of profit for the reason that the cost of production was likely to have suffered major fluctuations since the last declaration of the assessable value of the product was filed. However, the price list was approved on 4.10.1974 @ Rs. 2.73 per kg. as set out in the price list No. 1/74 furnished. This price list was approved till further order. This price was, as stated earlier, based on the costing data of 1973 and the margin of profit taken as 10% for the same year. The margin of profit, however, was not calculated on any specific basis but was traken as notional figure. Vide letter dated 31.10.1974, the appellants replied to the Superintendent's letter of 23.8.1974 that there had been no abnormal rise in the price of the raw material for processing UF resin and no addition to the price was warranted. The appellants, however, were issued a show cause notice vide C.No. SRP-20/AIU. VIII/Cal. VIII/75/1573 dated 24.10.1975 and they were' called upon under Rule 173C(3) of the Central Excise Rules, 1944 to show cause as to (i) why the assessable value of urea formaldehyde resin (UF resin) manufactured and entirely consumed by them should not be determined afresh for the period from 1.1.1974 to 31.12.1974 @ Rs. 4.86 per kg. as calculated in Annexure I on the basis of actual costing and margin of profit on cost of product for the period from 1.1.1974 to 31.12.1974. (ii) why the assessable value of urea formaldehyde resin, manufactured and entirely consumed by them during the period from 1.1.1975 to 30.9.1975 should not be determined at Rs. 4.86 per kg. on the basis of costing and margin of profit on cost for the period from 1.1.1974 to 31.12.1974 as calculated in Annexure I, subject to any alteration in the price so approved which may become necessary for any reasons, warranting submission of a fresh price list or an amendment of the list, for approval by the competent authority.
The appellants contended that as per the prevailing practice the costing data taken into account should be for the year 1973 for arriving at assessable value. The appellants contested an addition of 14.8% profit margin for the purpose of arriving at assessable value as against 10%. They also contended in actual practice their profit was less than 10%, but they were adding on ad hoc basis 10% for arriving at assessable value. They also contended that the price list for 1974 having been approved, the same could not be reviewed by the Assistant Collector. The Assistant Collector, however, vide his Order-in-Original approved assessable value @ Rs. 4.86 per kg. by adopting the higher margin of profit as indicated in the show cause notice. The Assistant Collector also did not agree with the appellants pleas for exclusion of amount received by way of import entitlement towards profit on credit side and the interest charges paid and the livestock etc. and other assets written off on the debit side. The Appellate Collector in his Order agreed with the Assistant Collector and repelled the arguments of the appellants and upheld the Assistant Collector’s Order except that he held that the demand could be raised for one year reckoned from the date of issue of the show cause notice. We observe that the show cause notice was issued in terms of Rule 173C(3) and which rule is reproduced as under :
“If in the list approved by the proper officer under Sub-rule (2) and alteration becomes necessary for any reason, the assessee shall likewise file a fresh list or an amendment of the list already filed, for the approval of such officer.”
It is seen that the Superintendent as early as 23.8.1974 had asked the appellants to furnish data as he felt that there was fluctuation in the element of cost after the last data furnished by the appellants. The authorities still did not apparently feel that any revision of the assessable value was called. for as they approved the price list on 24.10.1974 filed based on the data earlier made available. The need for the revised price was felt when the appellants made data available for 1974 for approval of the price list for the year 1975 and a show cause notice in this regard was issued on 24.10.1975. The price approval earlier accorded for clearance during 1974 was operative till further orders. Provisional assessment was not resorted to nor the appellants were asked to file a fresh price list for approval. The earlier price approval accorded vide Superintendent’s letter dated 4.10.1974 was in operation till further orders. Final order in regard to price applicable for 1974 in pursuance to the show cause notice was passed on 25.2.1977. A question that goes ¦ to the root of the matter is whether any demand could be raised without invoking the extended period which in this case has not been done. In fact, the Appellate Collector has limited the demand to one year. Against this Order of the Collector, the Department had not filed any appeal nor any review has been undertaken under Section 36(2) of the Central Excise Act. The demand, we find, was raised in pursuance of the Assistant Collector order under Rule 9B. The invocation of Rule 9B is not understandable as the assessments done earlier were not under the provisional assessment procedure as provided for under law. The approval for the price accorded was also not provisional. In this background, therefore, it has to be held that the demand issued in pursuance of the Assistant Collector’s Order was hit by time-limit as the demand could only be raised in pursuance of the Assistant Collector’s order for the normal time-limit of one year then applicable reckoned from the date of communication of this order which is dated 25.2.1977. By that time any demand raised for the period of 1974 would automatically stands barred by limitation. It would have been a different matter if the Department had been raising the demand on finalisation of RT-12 returns filed by the appellants or resorted to procedure under Rule 9B for provisional assessment or had been issuing demands in respect of each clearance made by the appellants. This, we find, has not been done.
4. The learned SDR for the Department brought to our notice the judgment in the case of Premier Automobiles Limited v. A.K. Bandyo-padhyay and Ors. : Miscellaneous Application No. 261/76, 1987 (30) E.L.T. 71 (Bom.), copy of which he has furnished. The facts and circumstances are distinguishable from the facts of this case. In that particular case, the government had fixed under the Price Control Order, issued under the Industrial (Development & Regulation) Act, 1951, the price for the Fiat car and that fixation of the price had been challenged in the Court. The Company in the invoices issued to the dealers endorsed that the price of the bill was provisional and would be subject to the decision of the Supreme Court and that if the Company succeeded in the Writ Petition in the Supreme Court that the price that would be charged would be in accordance with the bulletin of the Company of September, 1969. The excise authorities in that case were also aware of the endorsement by the Company in its invoices and also of the Company’s Writ Petition pending in the Supreme Court. The Department did not make any provisional assessment and made final assessment based on the price fixed under the Price Control Order. The Hon’ble Supreme Court held as under :
“In the peculiar facts and circumstances of this case, merely because final assessments were made by the Department did not prevent the Department from claiming the higher duty on the price fixed by the Supreme Court. The assessments were final and complete to the extent that they were made on the footing that (1) on the showing of the Company itself, the price was merely provisional; (2) to the knowledge of the Department, the Company’s invoices contained the representation that the price was not final but merely provisional subject to the decision of the Supreme Court; (3) the Company had, to the knowledge of the Department, filed its Writ Petition in the Supreme Court, challenging the Price Control Order and which Petition was, to the knowledge of the Department, pending before the Supreme Court and (4) both the Company and the Department were alive to the fact that the final price was dependent on the decision of the Supreme Court. It is manifest that in these circumstances, the assessments were made, based on the footing of these facts known to both the Company and the Department. To the extent that indisputably the price was provisional and subject to the decision of the Supreme Court, the assessments based as they were on the Company’s provisional price as shown in its invoices, were certainly final. If the Department had chosen to demand further duty on the provisional price, the Department would certainly have been in quandary as the assessments were completed assessments. That, however, is not what the Department seeks to do. It does not want to levy a further duty on the provisional price. What the Department seeks to do is to recover additional duty on the price fixed by the Supreme Court. That has nothing to do with the completed assessments made on the price which both parties know was merely provisional. Merely because in this case, for some reason or other, the Department did not choose to take a bond, guarantee or undertaking from the Company would make not the slightest difference. Thus in the peculiar facts and circumstances of this case, even though assessments made by the Department were final, they were so only to the extent of the provisional price and did not prevent the Department from seeking to recover the additional duty on the final price fixed by the Supreme Court with retrospective effect.”
It would thus be seen that the Hon’ble Supreme Court has not laid any law in regard to recovery to be made in case of short levy and the order passed was in peculiar facts and circumstances of that case only. There is no evidence to show that the price approved was provisional in any manner or was treated so by the Department or the assessee. In the present case while the Department entertained doubt that the assessable value should have been higher, no steps were taken to raise the demand within the period of limitation. The Tribunal being a statutory authority, constituted under the Central Excises and Salt Act, 1944, can only function within the parameter of Central Excise Act and Rules and has necessarily to go by the time-limits wherever prescribed for the purpose of passing orders regarding the demands etc. In view of the above, we allow the appeal in the terms above and set aside the order of the Appellate Collector.