1998 (5) TMI 319 - AT - Central Excise

Summary

Issues Involved:
1. Duty Demand and Penalty Imposed
2. Alleged Contraventions and Clearances Without Payment of Duty
3. Job Work and Exemption Notification
4. Time Bar and Limitation Period

Summary of Judgment:

1. Duty Demand and Penalty Imposed:
The Commissioner confirmed a duty demand of Rs. 6,05,054/- u/r 9(2) of the CER, 1944 read with the proviso to Section 11A(1) of the CEA, 1944 for pipes, waste, and scrap cleared without payment of duty by the appellants. Additionally, a penalty of Rs. 50,000/- was imposed on M/s. KPL and Rs. 5,000/- on M/s. Star Marketing u/r 209A of the CER, 1944.

2. Alleged Contraventions and Clearances Without Payment of Duty:
The appellants, M/s. KPL Ltd., were found to have manufactured and cleared PVC pipes, waste, and scrap without payment of duty and without following the Central Excise procedures. The officers discovered that KPL Ltd. had cleared goods without proper invoices and without accounting for them in the Central Excise records. M/s. Star Marketing was also alleged to have dealt with non-duty paid excisable goods liable for confiscation.

3. Job Work and Exemption Notification:
The appellants claimed exemption under Notification 83/94, arguing that the goods manufactured on a job work basis were wholly exempt from duty. However, the Commissioner rejected this plea, stating that the goods were fully manufactured and not in a semi-finished condition, thus not eligible for the exemption. The appellants contended that the goods cleared to Star Marketing were semi-finished and should not be included in the duty calculation. The Commissioner held that the appellants did not comply with the procedural requirements of the said Notification.

4. Time Bar and Limitation Period:
The appellants argued that the demand was barred by time as the show cause notice was issued beyond six months from the date of knowledge (18-10-1994). The Tribunal agreed, citing several precedents, and held that the show cause notice issued on 27-7-1995 was beyond the six-month period. Consequently, the demand was deemed time-barred, and the appeals were allowed on this ground alone, with consequential relief if any.