PEPSICO INDIA HOLDINGS PVT. LTD. Vs. CCE

JUDGEMENT

(1.) Appellants are a manufacturer of soft drinks. The dispute raised in this appeal is about the valuation of soft drinks sold from the depots. For the period October 1996 to June 1997, the appellants claimed deduction of freight from depot sale price in order to arrive at the assessable value and paid duty accordingly on a value which excluded the cost of freight from factory to depot. However, subsequently, between June 1997 and January 1998, they paid an amount of about Rs. 14 lakhs towards the duty which would have been payable had the cost of freight been included in the assessable value. They believed the matter ended there. That was not to be. In 2001, a Show -cause Notice was issued by Revenue alleging that the cost of freight was required to be included and there was short -levy. The appellant resisted the demand; but to no avail. The impugned order came to be passed demanding a duty of about Rs. 7 lakhs and imposing an equal amount of penalty.

(2.) The appellant resists the present demand at the threshold on the ground of limitation. Learned Counsel for the appellants has submitted that full facts about the method of valuation adopted by the appellant had been disclosed to the jurisdictional Central Excise officers in December 1996 itself. The learned Counsel took us to their letter dated 2nd December, 1996 under which price declaration was made and showed that Annexure II to that letter relating to wholesale price specifically indicate deduction of freight. It is the learned Counsel's submission that since the relevant facts were in the knowledge of the Central Excise authorities, a delayed reopening of the assessment was not permissible. He has also pointed out that almost twice the present duty demand remained already paid. A faint claim for refund of that excess paid amount also has been raised.

(3.) We have perused records and heard the learned SDR also. We are in agreement with the appellants that the reopening of the demand is, indeed, hit by limitation. Since the fact of deduction of freight from the sale price for the purpose of determining assessable value was known contemporaneously to the Revenue authorities, a delayed recovery proceeding by resorting to proviso to Section 11A cannot be sustained. The appeal succeeds on the ground of limitation. The proceedings are, therefore quashed. The appellant's claim for refund cannot be considered in this proceeding. Refund claims have to be filed in terms of Section 11B of the Act. They cannot be permitted to convert an ill advised short levy proceeding into a refund claim. Appeal is ordered as above.