Judgement

RANGANATH MISRA, J. :- This appeal under S. 35-L, Central Excises and Salt Act, 1944, is directed against the decision of the Customs, Excise and Gold (Control) Appellate Tribunal upholding the decision of the Appellate Collector of Central Excises, Madras. The short facts relevant for disposal of this appeal are that the appellant manufactures aluminium wire rods out of duty paid E.C. grade aluminium ingots on job basis on behalf of various customers. Between September 1974 and May 1977 it received a sum of more than 6 lakh rupees from customers by issue of debit notes over and above the amounts received under regular invoices. The Excise Authorities came across 966 such debit notes and on the basis thereof called upon the appellant to show cause why that amount which was said to be handling charges should not be added to the invoice price and differential duty thereupon be recovered. The Revenue took the stand that there was suppression of information on the part of the appellant with regard to collection of handling charges and, therefore, the notice was issued under R. 10(i)(c) of the Rules framed under the Act. The Assistant Collector confirmed the demand after cause was shown. The Appellate Collector upheld the demand by dismissing the appeal. The Tribunal has confirmed the Appellate order.

2. There is no dispute that with effect from 1-10-1975 a new S. 4 has been inserted into the Act providing for the mode of valuation. In view of the fact that the period involved in this appeal is from 27-9-74 up to 31-5-77, the period up to 30th of September, 1975 would be covered by the old S. 4 and from 1-10-75 till 31-5-1977, the provisions of new Section would apply in the matter of determining the assessable value. It is not disputed that from 15-7-75 the levy price of aluminium had been statutorily fixed at Rs. 7062/- per metric ton. It is the contention of the appellant that on the basis of R. 6(b)(i), Valuation Rules, the price of Rs. 7062/- should be adopted as being the price of comparable goods and with effect from 1-10-1975 the assessable value should have been fixed under proviso (ii) to S. 4(i)(a) or S. 4(l)(b) of the Act at the same amount. The admitted position is that there has been no sale between the appellant and the customers of the material. The appellant was collecting Rs. 600/- per metric ton as conversion charges and Rs. 60/- per metric ton as handling charges. The dispute in the appeal is confined to the question as to whether Rs. 60/- per metric ton collected as handling charges could be added for computation of duty.

3. Two contentions are advanced in support of the appeal: firstly, Rs. 60/- which was collected as handling charges was not to be taken into account for computing duty and secondly, the notice dated 13th of October, 1978 had been issued more than a year after the last date of the period in question and was barred by limitation. Prior to 6-8-1977, R. 9 which corresponds to S. 11-A of the Act provided a period of one year for taking of proceedings while R. 10 corresponding to the present S. 11 of the Act prescribed a period of 3 months for such purpose. With effect from 6-8-1977, when the rules were amended, the period of six months was substituted for the period of three months and the period of five years substituted for the period of one year. The Tribunal has held that the period of five years was applicable to the facts of the case on the basis that it is a case of suppression. It is the case of the appellant that for convenience the arrangement between the appellant and its customers was that instead of the customers collecting the ingots on the basis of allotment at their respective factories and then transporting the same to the appellant situated at Belgaum in the State of Karnataka, the appellant was being permitted to lift the allotted ingots directly and after carrying out the manufacturing process it used to deliver the same to the customers. The handling charges were intende