K.L. Rekhi, Member (T)

1. The respondents manufactured concrete sleepers for exclusive supply to the Indian Railways. In the manufacture of such sleepers, an iron component called malleable cast iron insert was used. This component was supplied by the Railways to the respondents free of charge and consequently the respondents did not include its cost in the price of their sleepers. Three points of dispute have arisen in the present appeal for our consideration :

(1) the issue on merits - whether the cost of inserts should be included in the assessable value of sleepers under Section 4 of the Central Excises and Salt Act, 1944.

(2) limitation - whether the show cause notice dated 8-10-1982 was time barred, and

(3) estoppel - whether, after having approved the first price list No. 1/80 dated 27-2-1980 on 5-10-1980 without inclusion of the cost of inserts, the Assistant Collector was estopped from initiating proceedings to include such cost while approving the subsequent price lists.

2. We have heard both sides and have carefully considered all their submissions. On the question of merit, the department relied on the Calcutta High Court judgment reported at 1983 ELT 733 while the resp