VEGETABLE VITAMIN FOODS CO. Vs. CCE, BOMBAY

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. vegetable Vitamin Foods Company Ltd., relates to the valuation of 'Glycerine' manufactured by them out of raw material supplied by M/s. State Trading Corporation.

(2.) Shri Gopal Prasad, learned Advocate, submitted that the Appellants manufacture 'Glycerine' from their own raw materials acquired from open market; that they also do splitting of imported tallow into "Tallow Fatty Acids" and "Glycerine" on behalf of State Trading Corporation (STC); that as per contract entered into with STC, they were giving delivery of tallow Fatty Acid to the customers of STC; that Glycerine, was sold by STC to the Appellants; that the price of Rs.14671.43 p. per M.T. was declared by them for such glycerine which includes the value of glycerine and the job charges; that, however, the Assistant Collector enhanced the value to Rs.18,000/ - per M.T. under Adjudication Order dated 11/14.2.1985; that two more show cause notices were issued for demanding differential duty for the period from December, 1982 to May, 1983 (SCN dated 6.6.1983) and from June, 1983 to September, 1983 (SCN dated 29.11.1983); that the Assistant Collector confirmed the demand under Adjudication Order dated 22.5.85 against which their appeal was also rejected by the collector (Appeals) under the impugned Order No. PPM 1626/87 dated 24.10.1988. The learned Advocate, further, mentioned that the assessment in respect of glycerine in question was provisional under Rule 9B of the Central Excise Rules; that the show cause notices for demanding differential duty had been issued prior to the approval of the price list furnished by them and as such the show cause notices were pre -mature; that the Appellate Tribunal in the case of Vijay Tank and Vessels Pvt.Ltd. vs.CCE, 1988 (38) ELT 509 has held that a show cause notice cannot be issued before the finalisation of the assessment on the R.T.12. He also places reliance on the decision in Union of India vs. Godrej & Boyce Manufacturing Company, 1989 (43) ELT 225 (Bom), Wherein it was held that in case of provisional assessment, relevant date for issue of show cause notice is the date of adjustment of duty and as such no notice is not issuable until the date of adjustment of duty after final assessment. Finally, he relies upon the decision of the Supreme Court in the case of Seraikella Glass Works Pvt. Ltd. vs. CCE, Patna, 1997 (91) ELT 497 (SC) wherein it was held that if the duty on final assessment payable by the assessee is more than the duty already paid by the assessee, "the assessee has to pay the deficiency by making a debit in the account current within ten days of the receipt of the copy of the return from the proper officer." The learned Advocate, therefore, contended that the issue of show cause notice before the finalisation of assessment was illegal as the proceedings under Section 11A can be taken only after assessment.

(3.) Countering the arguments, Shri P.K.Jain, learned SDR, submitted that the Assistant Collector had first issued a show cause on 19.3.83 for finalizing the assessable value of glycerine at Rs.18,000/ - per M.T. and only thereafter two show cause notices were issued for demanding differential duty; that the Assistant Collector revised the assessable value and in accordance with they were to pay the differential duty and as such no prejudice has been caused to the Appellants by issuing of the said two show cause notices. He also mentioned that the assurable value had been finalised and the Appellants had not brought on record any material to show that the order revising the assessable value upward had been set aside or modified and as such differential duty is payable by them.