2002 (11) TMI 417 - AT - Central Excise

Summary

Issues:
1. Denial of benefit of Exemption Notifications.
2. Applicability of Sections 11AC and 11AB.
3. Barred by limitation.
4. Classification of product as 'Mutton Tallow'.

1. Denial of benefit of Exemption Notifications:
The appeal challenges the order denying the benefit of Exemption Notifications related to Tallow production. The appellant, engaged in various products including animal fat or tallow, claimed exemption under Notification No. 18/91. Show cause notices questioned the eligibility of the appellant's tallow, obtained from buffalo, for the exemption. The adjudicating authority initially accepted the contention, but the Commissioner (Appeals) later reversed the decision. The Tribunal, after the appeal, settled under KVSS.

2. Applicability of Sections 11AC and 11AB:
The demand under the show cause notice for the period from 25-7-91 to 28-2-94 raised concerns regarding charging interest under Section 11AB and levying penalties under Section 11AC. The appellant argued that the demand was barred by limitation and that the tallow produced from buffalo should be considered 'Mutton Tallow' as per trade understanding.

3. Barred by limitation:
The appellant contended that the demand for the period in question was time-barred. The Tribunal analyzed various documents, including communication with the Central Excise authorities and classification lists, to establish that the product was consistently referred to as 'Mutton Tallow.' The Tribunal found that there was no suppression of facts by the appellant, and both parties shared the belief that the product was 'Mutton Tallow,' thus rendering the demand unsustainable due to being time-barred.

4. Classification of product as 'Mutton Tallow':
The appellant provided evidence, including correspondences from customers and a letter from a Professor, to support the commercial classification of the product as 'Mutton Tallow.' The Tribunal, based on the established lack of suppression of facts and shared understanding between the appellant and the authorities, ruled in favor of the appellant. It was determined that Sections 11AC and 11AB were not applicable to the case due to the demand period predating the introduction of these provisions.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, emphasizing the lack of suppression of facts and the shared understanding regarding the classification of the product as 'Mutton Tallow,' leading to the demand being barred by limitation and the inapplicability of Sections 11AC and 11AB.