1. The appellants agitated two issues before the Appellate Collector of Central Excise, Calcutta. The first issue related to the valuation of the goods manufactured and cleared by them. They were charging different prices from their customers depending on the distance between the customers' premises and the factory. The Deputy Collector took the highest price charged by the appellants to the nearest customers as the assessable value in respect of all the sales on the ground that their goods were capable of being sold at that price at the factory gate. The Deputy Collector's decision was upheld by the Appellate Collector. The period related to pre-October, 1975. Section 4 of the Central Excises and Salt Act was amended w.e.f. 01-10-1975. Section 4(a), as it existed prior to 01-10-1975, read as follows :- "Where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be - (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of removal of the article chargeable with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture or production, or if a wholesale market does not exist for such article at such place, at the nearest place where such market exists." The price approved by the Deputy Collector was the price at which the appellants' goods were capable of being sold at the factory gate. In fact, the said price was the price at which the goods were sold to the nearest customers. According to the aforesaid provisions of old Section 4, the assessable value determined by the Deputy Collector was correct.
Therefore, this part of the impugned order is upheld by us.
2. The second point agitated by the appellants before the Appellate Collector was that the demand was barred by limitation as the show cause notice was issued after expiry of six months. On this point Shri Sanjay Grover, learned advocate before us has argued that the period covered by the show cause notice dated 8-2-1978 issued under Rule 10 of the Central Excise Rules was May, 1973 to June, 1975. The duty demanded for that period was Rs. 21,268/-. He has argued that there was no suppression of facts by the appellants as the fact that they were charging different prices from their customers depending on the distance between the factory and the customers' premises was declared in the price lists. Hence, entire demand is time-barred. We observe from the impugned order that the Appellate Collector disposed of the point of limitation stating that the plea of time-bar was irrelevant inasmuch as the order related only to fixation of assessable value.
This finding of the Appellate Collector is not tenable. Although, the learned Senior Departmental Representative has argued before us that DD2 was issued on 24-12-1976, before issuing the show cause notice, the issue of DD2 does not protect the time limit prescribed under Rule 10 of the Central Excise Rules for issuing show cause notice. Even otherwise, the DD2 was also issued after expiry of six months' limitation. In the circumstances, we hold that the entire demand for duty was barred by limitation.
3. The appeal filed before us is disposed of in the above terms. The appeal is partly allowed with consequential relief to the appellants.