1. Appellant is absent in spite of notice bui has sent a request for decision of the appeal on merits. We have heard Shri M. Ali, JDR and perused the papers.
2. The dispute in the appeal relates to the period from 1.4.1982 to 3.12.1982. The appellant as job worker received raw materials from M/s Orient General Industries Ltd., manufacture Rotors and returned the same to the supplier who used the same in the manufacture of electric fans. Appellant was, from time to time, filing price-lists declaring assessable value as the sum total of the cost of raw materials, manufacturing cost and manufacturing profit on Rotors and clearing the Rotors on payment of appropriate duty.
3. Show Cause Notice dated 3.8.1984 was issued raising two main contentions. The first contention is that appellant cleared 40" size Rotors at Rs. 16.50 per unit whereas C.A. certificate dated 15.3.1982 showed value to be Rs. 19 for Rotors which the appellant declared and in the next revised price-list effective from 30.9.1982. Appellant cleared 18.601 Rotors during the period from 1.4.1982 to 31.12.1982 at the lower rate. There was suppression of facts and failure to file revised price-list effective from 15.3.1982. The notice proposed demand of differential duty as calculated in the Annexure A. The second contention raised in the notice is that lower assessable value was declared by appellant for 40" and 56" size Rotors, that the Chartered Accountant arrived the cost as Rs. 18 and 21.50 respectively to which should have been added 10% margin of profit and the correct assessable value would be Rs. 20 and 23.50 respectively instead of Rs. 19 and Rs. 20 respectively. 19,845 Rotors of 50" size and 29,284 Rotors of 56" size were cleared during the period from 1.4.1982 to 31.12.1982. Notice proposed demand of differential of duty on this count also.
4. Though the appellant opposed the notice on merits as well as on the ground of limitation, the Addl. Collector confirmed the demand. Hence the present appeal.
5. The main contention urged is that the Show Cause Notice issued on 3.8.1984 in respect of the period from 1.4.1982 to 31.12.1982 was barred by time. We find that in regard to clearance of 40" size Rotors, the notice alleged suppression of facts but there was no such allegation seen in the notice with regard to the clearance of 50" size and 56" size Rotors. We are, therefore, of the opinion with the demand proposed in Annexure A of the notice in respect of 50" size and 56" size of Rotors was barred by time. The total demand on this account is Rs. 13,391.91 this demand is barred by time.
6. What survives for consideration is the demand of Rs. 9,785.52 in respect of 40" size Rotors. According to the Show Cause Notice, CA certificate dated 15.3.1982 indicated the price to be Rs. 19 per Rotor, but this price was declared only with effect from 13.9.1982. We have gone through the copies of the price-list filed in 1980-82 and the CA certificates filed along with the price list. Certificate dated 15.3.1982 showed the price of raw materials as Rs. 14.06, fabrication charges including manufacturing profit as Rs. 3/- and contingency as 44 paisa, the total being Rs. 17.50 in respect of 40" size Rotors. We find that adding margin of profit again to the total was same as Rs. 19/-.
If Rs. 3/- represented fabrication charges received by the appellant, that naturally included the appellants manufacturing profit. That being so, there was no justification to add separately Rs. 1.50/- as margin of profit. In these circumstances, we find that there was no short payment of duty in respect of 40" size Rotors. For the reason indicated above, we set aside the impugned order and allow the appeal.