ORDER
V.P. Gulati, Vice President
1. The issue in the appeal relates to demand of duty for the reason that the freight charges actually incurred were less than the element of equalised freight which was claimed as abatement from the sale price. The ld. advocate has pleaded that the appellants based on the past 6 months expenditure on freight had worked out equalised freight element and the department had with full knowledge of this fact, approved the price list. He has pleaded that in the subsequent 6 months period based on the sales pattern the expenditure on freight came to be incurred less than the amount which was claimed as equalised abatement. He has pleaded that longer period of limitation alleging suppression has been invoked against the appellants. He has pleaded that the appellant could not have anticipated that their expenditure on freight depending on the sale pattern would come to be less in a 6 months period and were on record as to the basis on which they claimed the abatement of the element of equalised freight. He has pleaded that on limitation alone, the appellant’s plea against demand of over Rs. 6,000/- has to be allowed.
2. The ld. JDR for the department has pleaded that the period involved is two months i.e. June, 1985 and June, 1986. He has pleaded that the demand in respect of the freight element incurred is for these two months. He has pleaded that the department came to know about the lower freight incurred only in 1987 and the appellant did not come on record in this regard. He has therefore pleaded that the appellants have suppressed the facts.
3. We have considered the submissions. We observe the demand has been made in respect of clearances made during two months. The ld. Advocate has brought to our notice that the Collector himself has observed that in certain months freight element incurred was higher than what was claimed as equalised freight. The question to be answered is whether in the context of ground realities the element of freight element for abatement on equalised basis has to be determined month by month or over a period of one year and whether any minor variation that may arise can give rise to a suppression of facts. We observe that the appellants when they filed the price list had adopted a basis of past expenditure incurred on the freight for seeking abatement of equalised freight element. It is not the case of the department that the appellants in any way furnished wrong data or claimed abatement based on some manipulated figures. It is what happened in the future in regard to expenditure incurred which has given rise to the demand.
4. We observe based on sale pattern and also the contract of the carriage of the goods freight element could vary during certain periods. There is nothing on record to show that the appellants resorted to any subterfuge to deprive the department of the legitimate revenue due to them for the reason of manipulating the carriage of goods in a manner to pay lesser freight or to vary their pattern of carriage of goods to ensure payment of lesser freight. The variation of the freight charges on future date which could not have been anticipated earlier when the price list was approved cannot be taken to have given rise to an element of suppression on the part of the appellants. In this background, we are of the view that the longer period of limitation could not have been invoked and demand as urged by the appellants is barred by limitation.
5. The appeal is therefore allowed.