COMMISSIONER OF C. EX. Vs. DELHI STEEL INDUSTRIES

JUDGEMENT

(1.) THE appellants were engaged in the manufacture of Axle Beam Assembly (Chapter Heading No. 87.08 of the Central Excise Tariff Act) on job work basis.

(2.) During the period February, 1991 to July, 1995, they supplied axle beam assembly to M/s. Punjab Tractor Limited (PTL) after fitting therein the bushes supplied free of cost by M/s. PTL. The cost of bushes was not included in the assessable value of the axle beam assembly for the purpose of determination of the Central Excise duty. Department contended that the cost of bushes should be included in the assessable value and, therefore, by show -cause notice dated 23.02.96, they raised a demand of Rs. 3,23,283/ - on the appellants, alleging that there was a short payment of Central Excise duty to the said extent on account of non -inclusion of the cost of bushes in the assessable value of the goods cleared during the aforesaid period of dispute. For raising such demand of duty, the Department invoked the extended period of limitation prescribed under the proviso to Section 11A(1) of the Central Excise Act, by alleging that the respondents had wilfully suppressed the fact regarding fitment of bushes supplied by M/s. PTL under Rule 57F(2) of the Central Excise Rules for job work, with intent to evade payment of duty leviable on axle beam assembly. The party contested the show -cause notice. The jurisdictional Assistant Commissioner, who adjudicated the dispute, confirmed the above demand of duty and imposed a penalty of Rs. 3,25,000/ - under Section 11AC of the Act read with Rule 173Q of the Rules. This order of the Assistant Commissioner was set aside by the Commissioner (Appeals), in the appeal filed by the assessees. The lower appellate authority allowed the assessee's appeal on both merits and limitation. The present appeal before the Tribunal is against the order of the Commissioner (Appeals).

(3.) SINCE the learned Counsel for the respondents has fairly, conceded the appellant's case on the issue whether the cost of bushes was includible in the assessable value of axle beam assembly manufactured and cleared by the appellants to M/s. PTL during the period of dispute, the said issue does not survive for consideration. We are seized of the limited question whether the demand of duty was hit by limitation or not. We note that the lower appellate authority held the issue of time bar in favour of the assessees on the grounds that, as the appellants were filing RT -12 returns to the Department, the movement of bushes on challans under Rule 57F(2) of the Central Excise Rules and the procedure adopted in connection therewith was well within the knowledge of the Department and, therefore, there was no warrant for invoking the extended period of limitation. We find that this finding of the lower appellate authority has gone unchallenged in the present appeal, as rightly pointed out by the learned counsel for the respondents. We further note that the appellant has raised the following ground for challenging the order of the Commissioner (Appeals) on limitation : -