2002 (10) TMI 508 - AT - Central Excise

Issues:
Classification under Notification No. 208/83-C.E.
Extended period of limitation invoked by the Department.
Interpretation of Notification No. 208/83-C.E. regarding re-rollable materials.
Bona fide belief of the appellants regarding exemption under the notification.
Applicability of Circulars issued by the Board.
Precedents cited by the appellants regarding time limit.
Contention of the Department on the appellants' failure to obtain a license.
Decision on the ground of limitation.

Classification under Notification No. 208/83-C.E.:
The appellants, engaged in manufacturing rolled products, contested the denial of exemption under Notification No. 208/83-C.E. for goods classified under Chapter Heading 72.09. The issue revolved around the correct classification of the goods and their entitlement to the said exemption.

Extended period of limitation invoked by the Department:
Apart from the merits, the appellants challenged the Department's use of the extended period of limitation, arguing that the demand was time-barred. They highlighted the Department's awareness of their activities, previous representations, and statements taken, contending that there was no justification for the extended period.

Interpretation of Notification No. 208/83-C.E. regarding re-rollable materials:
The appellants argued that the non-inclusion of certain chapter sub-headings in the notification was an oversight, leading them to believe in their entitlement to exemption. They emphasized the distinction drawn in re-rolling material based on the source, especially material obtained from ship breaking.

Bona fide belief of the appellants regarding exemption under the notification:
The appellants claimed a bona fide belief in their entitlement to exemption under the notification, citing contentious views on the dutiability of re-rollable scrap from ship breaking and previous legal proceedings. They asserted that their actions were not aimed at evading duty.

Applicability of Circulars issued by the Board:
The appellants relied on Circulars issued by the Board to support their case, emphasizing the deemed duty paid status of inputs purchased from the market. They argued that their purchases complied with the clarifications provided in the Circulars.

Precedents cited by the appellants regarding time limit:
Citing judgments from the Apex Court and the Tribunal, the appellants argued that Circulars of the Board were binding on the revenue. They referenced previous decisions that supported their interpretation of eligibility for exemption under the notification.

Contention of the Department on the appellants' failure to obtain a license:
The Department contended that the appellants' failure to obtain a license under the Central Excise Act and Rules contradicted claims of acting bona fide. They highlighted the absence of essential documents during the relevant period, challenging the appellants' credibility.

Decision on the ground of limitation:
The Tribunal found merit in the appellants' argument regarding the limitation period, considering factors such as past licensing history, legal proceedings, and Board clarifications. It held that the invocation of the extended period of limitation was legally unsustainable, ultimately allowing the appeals on this ground.

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