K.L. Rekhi, Member (T)

1. This is an appeal filed by the department. At the out-set, the respondents made a preliminary objection saying that the appeal was time-barred. They stated that they had received the impugned order-in-appeal at Bangalore on 29-4-1986. The Assistant Collector of Central Excise at Bangalore received it on 14-5-1986. How come the Collector of Central Excise at Bangalore received it as late as on 2-6-1986, asked the respondents. The Bench asked the learned representative of the department to produce the record of the Collector's office in order to verify the actual date of receipt of the impugned order-in-appeal by the Collector. At the resumed hearing, the learned representative of the department produced a photocopy of the impugned order-in-appeal as received by the Collector. The photo-copy bore a stamped inward entry number, Collector's dated stamp of receipt of 2-6-1986 and initials of a couple of officials dated 5-6-1986. There appeared to be no reason to doubt that the stamp and the initials were all in the normal course of office routine. The respondents then left the matter to the discretion of the Bench. The Bench found no reason to doubt the Collector's statement that his office had received the impugned order-in-appeal on 2-6-1986 only. His appeal filed on 26-8-1986, within the prescribed time limit of three months, was, therefore , held by us to be in time.

2. The respondents filed the aforesaid misc. application to bring on record certain additional evidence. The evidence appeared quite relevant to us and we took it on record.

3. Consideration of the appeal was then taken up and both sides were heard. The point of dispute in the appeal is determination of assessable values of glass bottles manufactured by the respondents and mainly used by various units within the same group of industry. The two price-lists involved in the controversy before us were filed on 24-10-79 and 10-9-81 and the period of dispute was stated to be 1-7-1979 to 30-6-1983.

4. Before starting the discussion, it is necessary to spell out the status of the respondent unit. They were not a separate legal entity themselves. They were a manufacturing unit within the Khoday group of industries. Within the group, M/s. Khoday Distilleries Ltd. (K.D.L.) were the holding company. Under the holding company was M/s. Khoday Brewing & Distilling Industries Pvt. Ltd. (K.B.D.I.). The present respondents, United Glass, were a Division of M/s. K.B.D.I. Within the Group was a partnership firm named Khoday R.C.A. also. Its partners were Khoday family members. M/s. K.D.L., M/s. K.B.D.I. and Khoday R.C.A. were all engaged in the business of manufacturing and bottling beer and alcoholic liquors.

5. The various units in the Group required glass bottles in which beer and whisky etc. was to be filled and marketed. Till 1978, they purchased the glass bottles from others, mainly from M/s. Alembic Glass Industries which were also situated nearby at Bangalore. In order to meet their requirements of glass bottles themselves, the Group set up the respondent unit in 1978. Besides supplying glass bottles to the other units in the Group, the respondents made some sales to 'others' also. According to the figures given to us by the respondents at the time of hearing, such sales to 'others' were as under :-

6. The controversy regarding valuation of the glass bottles manufactured by the respondents and captively used within the Group arose during the earlier period also. It culminated in the order-in-review passed by the then Collector on 20-8-81 wherein he ordered that the values should be determined under Section 4(1)(a) of the Central Excises and Salt Act, 1944 on the basis of ex-factory prices charged to others. The respondents say that this order of the Collector became final as it was not taken up for further appeal or revision by the department.

7. During the material period of the present appeal,