Judgment:
1. The appeal by the department is against the order-in-appeal passed by the Collector of Central Excise (Appeals), Calcutta holding that the appellants before him who are respondents herein were eligible for the refund as ordered by him, overruling the findings of the Assistant Collector. The Assistant Collector while rejecting the refund claim of the present respondents had held that in arriving at the assessable value of the goods in question deduction could be allowed only of the amount of duty calculated with reference to the exempted rate of duty and not at the statutory rate otherwise leviable but for the exemption.
The Collector (Appeals), however, found that respondents had realised from their customers only the gross value of the goods as agreed to between them and did not realise any extra amount as Central Excise duty. He, therefore, held that as they had paid such excise duty in excess to which the refund claim related, there was no justification for the Assistant Collector to take into consideration the gross value of the goods mentioned in the relevant gate passes. He accordingly set aside the Assistant Collector's order with the direction to grant to the respondents refund claim of Rs. 7,304.12.
2. In the appeal filed by the department it is pointed out that while the respondents had claimed the initial refund of duty of Rs. 12,420.85 they had revised this claim to Rs. 5,432.31. The Collector (Appeals) had, however, wrongly directed grant of refund of Rs. 7,304.12 which was higher than the revised claim of the respondents. It has been contended in the appeal that while the finding of the Collector (Appeals) is that payment of duty had been made on the basis of gross value for goods cleared under the specified gate passes this had not been found to be in order by the department on verification of the gate passes and corresponding invoices and hence it has been pleaded that the claim of the respondents that excess duty had been paid did not appear to be correct.
3. Respondents are not present in spite of notice of hearing issued on 17-10-1997. We have heard Shri Sanjay Srivastava, learned DR and proceeded to dispose of the appeal.
4. It was stated by Shri Srivastava in reply to a query from the Bench whether the invoices or gate passes or any other documents available with the department have pointed to the recovery by the respondents from their customers of any amount in excess of what has been declared therein, that there is no such allegation and in fact the Assistant Collector had also not held that such recovery had been made. He, however, took us through the order-in-original passed by the Assistant Collector particularly paragraphs 8 and 9 thereof where the method for arriving at the assessable value from the cum-duty price had been considered by the Assistant Collector. Shri Srivastava, learned DR submitted that, as stated by the Assistant Collector in his order, the amount that would qualify for abatement from cum-duty value will only be the duty based on the effective rate of duty leviable on the goods in question after taking into account the exemption available. He, however, admitted that the Assistant Collector should have applied the concessional rate of duty of 5%, at which rate, duty had been paid and not applied nil rate.
5. We have considered the submissions. We have perused the record.
There is a preliminary objection in the appeal that the refund claim relating to duty paid vide Gate Pass dated 13-8-1988 was barred by limitation as refund claim was received only on 15-2-1989. This has already been overruled by the Tribunal vide Order No. 541/CAL/1990, dated 7-11-1990 as 13-2-1989 and 14-2-1989 were holidays being Saturday and Sunday and the refund claim was filed on the next working day viz.
15-2-1989.
6. Turning to the merits of the appeal we find that the Assistant Collector has worked out the assessable value from the cum-duty price and come to the conclusion that the appellant had actually paid less duty than what they should have. He has purported to proceed on the basis of Section 4(4)(d)(ii) of Central Excise Act. He has taken the sale value as Rs. 43,37,951.20 and the duty paid as Rs. 2,16,576.96 and totalled the two amounts to arrive at, what he has called, sale price-cum-duty. From the said total amount of Rs. 45,54,528.16, he has arrived at the assessable value by applying Section 4(4)(d)(iii) as per the following formula :- This formula proceeds on the fallacy that the duty rate was nil. As pointed out by the Departmental Representative during the hearing which also accords with the facts available on record, the respondent had paid duty at 5%. To apply nil rate of duty in the calculation was plainly erroneous and has understandably led to an untenable finding.
The total sale price realised by the respondent is seen from the invoices and the duty actually paid is available on the Gate Passes.
Unless there is evidence to show that the respondent recovered duty separately from the customers and thereby received more amounts from them than what were shown in the respective invoices, it will not be permissible to reject the contention raised by the respondent that the invoice price was not ex-duty but cum duty. This is the view taken by Collector (Appeals) in his order. He had found the claim of refund for Rs. 7,304.12 made by the present respondent to be admissible and allowed the appeal with the direction to the Assistant Collector to grant the refund claim for Rs. 7,304.12. The original claim was for Rs. 12,420.85. This was rejected by the Assistant Collector. In the present appeal it is contended that the Collector (Appeals) has ordered refund of Rs. 7,304.12 which is more than the sum of Rs. 5,432.31 which was the revised amount claimed by them at the time of personal hearing.
There is nothing on record to confirm this contention. On the contrary the Collector (Appeals) clearly refers to the refund claim being for Rs. 7,304.12 which he found to be in order as it was found that the respondent did not receive any extra amount as Central Excise duty from the customers and the total amount received as per the contract was the cum duty value.
7. The respondent in the cross objection filed against the appeal has pointed out the amount of Rs. 43,37,951.20 mentioned in paragraph 9 of the Assistant Collector's order has been taken from the statement submitted by them to clarify the claim and that this amount was the total gross value inclusive of duty and Sales Tax. The Assistant Collector has again added a sum of Rs. 2,16,576.96 as duty to the cum-duty price and thereby the duty amount has been taken twice. This contention accords with the finding of the Collector (Appeals). We see no reason to interfere with the same. We accordingly uphold the order-in-appeal and dismiss the appeal.