2001 (6) TMI 727 - AT - Central Excise

Summary

Issues:
Duty recovery on Lime manufactured, Conscious withholding of information, Dutiability of the product, Marketability of the product, Suppression of information, Limitation period for demand.

Duty Recovery on Lime Manufactured:
The case involved a show cause notice questioning the duty recovery on 9746.416 MT of Lime manufactured during a specific period. The Commissioner noted that the Department was aware of the lime manufacture since 1991, and there was no conscious withholding of information. Consequently, the show cause notice issued in 1994 was held to be time-barred due to limitation.

Dutiability of the Product:
The Revenue raised concerns about the dutiability of the lime product, citing the Chemical Examiner's opinion that the product was quick lime. The Assistant Commissioner confirmed the marketability of the product based on its classification under a specific tariff description. The product was deemed marketable even though the company was not actively marketing it at the time, as it was being used internally for various processes.

Marketability of the Product:
The judgment emphasized that the lime product was marketable despite not being actively sold in the market. The product's utility in various processes, including effluent treatment and staple fiber division, indicated its marketability. The absence of active marketing did not negate the product's potential for sale, as it was suitable for commercial use based on its characteristics and stability.

Suppression of Information:
The issue of suppression arose concerning the company's delayed disclosure of lime manufacturing details to the Department. The company provided information on lime production only in late 1990, leading to the Department's awareness of the product's manufacture without duty payment. The duty imposition was sought for a specific period when the company had not paid duty on the product used internally, indicating suppression of information.

Limitation Period for Demand:
The judgment highlighted that the demand for duty recovery for the period under dispute was barred by limitation. The ongoing examination of the entity's dutiability by the Department since 1991, without any evidence of a change in the entity's nature, led to the conclusion that the demand issued in 1994 was time-barred under Section 11A(1). As a result, the appeal was rejected based on the limitation period for the demand.

This comprehensive analysis of the judgment addresses the duty recovery on lime manufactured, issues related to dutiability and marketability of the product, suppression of information, and the limitation period for the demand, providing a detailed overview of the legal considerations and findings in the case.