GABRIEL INDIA LTD. Vs. CCE

JUDGEMENT

(1.) THIS is an appeal filed by the above appellants against the order -in -original dated 31.1.1991 passed by the Additional Collector of Central Excise, Chandigarh confirming duty demand of Rs. 1,75,838.94 against the appellants and imposing a penalty of Rs. 25,000/ - on them.

(2.) AS regards the allegation of mis -declaration of cost of production of copper powder, the Additional Collector in the impugned order held that the appellants had intentionally not filed the revised price list for the year 1985 -1986 and 1986 -1987 though their material cost had increased, though as per Rule 173C(10) they were required to do so when there was increase in the cost of production of the goods. As regards inclusion of electricity, water charges and depreciation while working out demand, Additional Collector rejected the assessee's contention that different sections of the powder plant worked only in single shift. Addl. Collector reasoned that since one section of the powder worked in first shift and the other section worked in the second shift it resulted in the powder section working for two shifts. Since the powder plants worked for two shifts, electricity and water are also consumed during both the shifts. Inclusion of the said charges and depreciation on a two shift basis while working out the demand was therefore, confirmed.

(3.) AS regards limitation, ld. Counsel submitted that the demand is on account of re -working of cost by the department The department has taken into account the actual material cost of the input for the period August, 1984 to May, 1985 as against the price originally adopted in the price list filed by the appellants from September, 1984 to November, 1984. The appellant submits that the demand is barred by limitation. The reason being that at the time of approving the price lists, the department was very much aware of the fact that the rate of material was worked out by the appellants only for the quarter September, 1984 to November, 1984. This was done as it was the last quarter for which the prices were available with the appellant when they filed the price list on 19.1.1985. The basis adopted by the appellant was very much in the knowledge of the department. Hence, the department now cannot suddenly turn around and say that there is suppression as it would be not factually correct and is therefore unsustainable. Therefore, the demand is barred by limitation. As regards depreciation Ld. Counsel submitted that the Additional Collector of Central Excise has observed that one Section of powder plant works in one shift and the other section works in the second shift. Therefore, depreciation would be added on double shift basis. This conclusion of the Additional Collector of Central Excise is contrary to his own finding about the working of one section only in one shift at a time. In the context of this finding, depreciation can be included only on single shift basis. The same position applies equally to electricity and water charges also.