2001 (11) TMI 668 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand of duty under Section 11A of the Central Excise Act, 1944
2. Imposition of penalty under Rule 9(2) and Rule 173Q of Central Excise Rules, 1944
3. Availment of benefit of Notification No. 202/88-C.E. for clearing final products without duty payment
4. Use of waste and scrap in manufacturing ingots and its impact on exemption eligibility
5. Point of limitation regarding the notice period for demand of duty
6. Allegations of deliberate evasion of duty and invoking longer period of limitation
7. Claiming exemption under two different Notifications and its implications

Analysis:

1. The Commissioner confirmed the demand of duty against the appellants under Section 11A of the Central Excise Act, 1944, amounting to Rs. 29,59,773.00. Additionally, a penalty of Rs. 5.00 lakh was imposed under Rule 9(2) and Rule 173Q of Central Excise Rules, 1944.

2. The appellants, engaged in manufacturing steel ingots, were availing the benefit of Notification No. 202/88-C.E. for duty exemption. The Revenue contended that using waste and scrap in manufacturing made them ineligible for the Notification's benefit, leading to the demand confirmation and penalty imposition.

3. The appellants argued waste and scrap were valid inputs under the Notification and challenged the limitation of the notice issued in 1995 for the period from 1990 to 1993. They presented evidence of regular compliance with Central Excise requirements, including filing returns and maintaining records.

4. The Revenue claimed deliberate evasion of duty by the appellants, alleging misuse of multiple exemption Notifications. The Commissioner upheld the longer limitation period based on the appellants' dual claim for exemptions, indicating an intent to mislead.

5. The Tribunal analyzed the grounds for invoking the longer limitation period, emphasizing the need for suppression of facts, fraud, or misstatement. It noted the Revenue's awareness of the appellants' use of waste and scrap, as evidenced by official correspondence and records, leading to the conclusion that the demand was time-barred.

6. The decision to set aside the demand was based on the lack of justification for invoking the longer limitation period. The Tribunal found no evidence of deliberate evasion or misleading actions by the appellants, emphasizing the Revenue's knowledge of the inputs used and the appellants' compliance with reporting requirements.

7. As the appeal succeeded on the limitation issue, no findings were provided on the case's merits, highlighting the Tribunal's focus on the procedural aspect of the demand confirmation.