2005 (98) ECC 182 (SC)

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 3638 of 1999

S.N. Variava, DR. AR. Lakshmanan and S.H. Kapadia, JJ.

M.K. Kotecha

Versus

Commissioner of Central Excise, Aurangabad

Civil Appeal No. 3638 of 1999

[From the Judgment and Order dated 16.2.99 of the Central Excise Customs and Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai in A. No. E/776-V/95-Bom in O.No. C-II/374/WZB of 1999]

Decided on 4.1.2005

Demand (C. Excise)

Limitation -- Submission before the Collector that assessee had undertaken a composite contract (project) and, therefore, the prices of comparable goods were not available. However, the RCC pipes and collars were manufactured by the three units of the appellant. The contract price agreed upon was based on complete break-up of the charges including the prices of the RCC pipes and collars. The pricing of RCC pipes and collars was indicated in the project reports. They were based on the pricing guidelines fixed by Maharashtra State Sewerage and Water Board. The said Board had made rate analysis to arrive at the value of the RCC pipes and collars. Therefore, the appellant knew of the comparability of his goods with those of other manufacturers. Hence, the Collector was right in coming to the conclusion that the appellant had wilfully misstated and suppressed the facts in order to mislead the department --Limitation invocable -- Department was right in making best judgment assessment under Rule 7 of Valuation Rules, 1975.

Appeal dismissed

PRESENT :

Shri C.N. Sree Kumar and Mrs. M.L. Shyjatha, Advs. for the appellant.

S/Shri Mohan Parasaran, Additional Solicitor General, A. Subba Rao, Nitesh Rana, Gaurav Dhingra, P. Parmeswaran and B. Krishna Prasad, Advs. with him for the respondent.

Cases Cited :

1. CCE, Baroda v. Cotspun Limited, 2000 (69) ECC 451 (SC) ............................. [Para 25]

2. CCE, Hyderabad v. M/s Chemphar Drugs & Liniments, Hyderabad, 1989 (21) ECC 66 (SC) [Para 10]

3. Cosmic Dye Chemical v. CCE, Bombay, 1994 (48) ECC 55 (SC)...................... [Para 12]

4. Gwalior Rayon Mnfg. (Wvg) Co. v. UOI 1982 ELT 844 (MP).............................. [Para 17]

5. ITW Signode India Ltd. v. CCE, 2003 (90) ECC 757 (SC)................................ [Para 25]

6. Pushpam Pharmaceuticals v. CCE, Bombay, 2002 (80) ECC 6 (SC)................ [Para 11]

7. United Glass v. CCE, 1996 (53) ECC 100 (SC)............................................... [Para 22]

8. Universal Cables Ltd., Satna v. Union of India 1977 (1) ELT J.92..................... [Para 24]

JUDGMENT

Kapadia, J.

This is an appeal under section 35L(b) of Central Excise Act, 1944, preferred by the assessee, against the judgment and order dated 16.2.1999 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai, confirming the demand made by the department for short-levy amounting to Rs. 18,34,464 together with a penalty of Rs. 2 lacs.

2. The short question which arises for determination in this appeal is - whether the department was justified, on facts and circumstances of the case, in invoking the extended period of limitation under the proviso to section 11A(1) of the Central Excise Act, 1944 (hereinafter referred to for the sake of brevity as "the 1944 Act").

3. The appellant, M.K. Kotecha, proprietor of M/s Tapi R.C.C. Pipe Product, M/s Bamnod Cement Pipe Product and M/s Sakri Cement Pipe Product, is a manufacturer of R.C.C. pipes and collars falling under Chapter Heading 6807.00. During the period April, 1990 to June, 1992, he cleared RCC pipes and collars to various Societies under the Lift Irrigation Scheme, by declaring that the RCC pipes and collars were not sold but were captively consumed in the projects undertaken by him under the works contract. Accordingly, he filed the price list together with the annexure thereto giving following particulars:-

PRICE LIST

Sl. No | Excisable Goods | + | Comparable goods if known to Assessee | + | + | + | + | Differ-ence if any in mat-erial charac-teristics of the goods & assess-ment of compa-rable goods | Value of the Goods in Col. 2 classified and approved | + | Value of the Goods in Col.2 as appro-ved by the proper officer | Rem-arks
^ | Des-crip-tion | Tariff Classi-fication | Des-crip-tion | Tariff Classi-fication | Assessable Value As |  |  |  |  |  |  |
Pipe Collar | + | Unit of Sale | ^ | Pipe | Collar | ^ | ^ |  |  |  |  |
1 | 2 | 3 | 4 | 5 | 6 | + | 7 | 8 | 9 | + | 10 | 11
| RCC Pipe & Collar |  |  |  |  |  |  |  |  |  |  |
Size in mm. & class | 6807.00 |  |  |  |  | No. |  |  |  |  |  |
1 | 1200 mm NP3 | " |