Per Shri V.P. Gulati :

The issue in the appeal relates to demand of duty on the interest accrual on the advance taken by the appellants towards tool casting for ultimate supply of the goods by use of the tools manufactured.

2. The learned Consultant for the appellants has pleaded that apart from the merits of the issue regarding leviability of duty on the interest accrual they have pleaded limitation also before lower authority as there was no suppression on the part of the appellants warranting invokation of the longer period of 5 years. He has pleaded that the appellants have in their defence clearly stated that the price list which they had filed and the purchase order they had submitted carried the fact of advance which the appellants were getting from their customers. He has pleaded that in this background the question of suppression of fact on their part would not arise. He has pleaded that the lower authority in para 10 of his order has held suppression against the appellants by holding that the appellants have furnished the details in regard to the advance taken later after receiving communication from the authorities. He has pleaded that this fact alone could not determine the appellants' culpability in the matter. They had clearly come on record by submission of the contract for the advance taken. He has pleaded that the price list had been filed and RT 12 returns had been finalised and the manner of repayment of the advance taken was also reflected in the invoice. He has pleaded that the appellants had brought all the facts on record and there is no mala fide can be read in their conduct. He has further urged that at the relevant time decision regarding includibility or otherwise of the interest element accruing on the advance taken for the purpose of arriving at the assessable value was not clear and the matter had acquired finality with the judgement of the Hon'ble Supreme Court in the case of Metal Box India reported in 1995 (6) RLT 519 (S.C.) =1995 (75) ELT 449 and subsequently by the judgement of the Division Bench of the Hon'ble High Court of Madras in the case of Laxmi Machines Ltd. reported in 1995 (77) ELT 799. He has pleaded that by latter judgement the Madras High Court while interpreting the judgement of the Hon'ble Supreme Court has clearly held that in case that a nexus will have to be established between the advance taken and price at which the goods were sold. He has pleaded that in this background, the appellants could not be found fault with for not having included the interest element for the purpose of arriving at the assessable value. He has pleaded that on this ground alone the appellants' appeal has to be followed as the show cause notice was issued beyond the period of six months.

3. Shri S. Murugandi, learned DR for the department has pleaded that the learned lower authority has given clear finding in this regard in para 10. He adopted the reasoning therein which is reproduced below for convenience of reference :

10. It was also argued by the assessee that extended time limit under proviso to Section 11A is not invokable as the price list Sl.No. 26/21.09.1993 (Dvl.Sl.No. 149/94) was filed on 21.09.1993 with an enclosure in the form of purchase order No. C 193337800 dated 09.06.1993 and the department was aware of the fact of receipt of advances for tooling well in advance. It was contended that when the department was aware of the facts the show cause notice issued on 25.08.1995 was time barred. Reliance was placed on Blue Dess Laboratories Ltd. Vs. CCE, Aurangabad 1995 (75) ELT 710 (Trib). In this connection, it is seen that even though the purchase order contains the fact of receipt of advance amounts for tooling, the details regarding the exact amounts received with dates were informed to the department only on 22.08.1994. This information was also furnished only after issuing many letter from the department. When the advances were received as far back as from 31.03.1991 to 30.11.1991, t