2003 (12) TMI 343 - AT - Central Excise

Summary

Issues:
1. Duty exemption on captively consumed goods.
2. Ownership of goods by the job worker.
3. Applicability of extended period of limitation.
4. Interpretation of relevant notifications.
5. Allegations of avoiding payment of sales tax.

Analysis:

1. The case involved a dispute regarding duty exemption on goods captively consumed by Natraj Ceramics & Chemical Inds. Ltd. The job worker did not pay duty on the calcined bauxite used in manufacturing excisable goods, claiming exemption under Notification 67/95. The Commissioner imposed duty and penalty, alleging an attempt to evade payment.

2. The appellants argued that there was no legal requirement for the job worker to own the goods under Notification 67/95. The Commissioner's reasoning was challenged, stating no loss to the department occurred. The ownership issue was not a part of the notification, and the Commissioner's new case was deemed flawed.

3. The question of the extended period of limitation was raised, with the departmental representative supporting the Commissioner's decision. However, the Tribunal found no merit in the Commissioner's case, as the supplier had availed exemption under Notification 214/86, and the job worker under 67/95, without causing revenue loss.

4. The Tribunal analyzed the relevant notifications, highlighting that Notification 214/86 exempted raw bauxite from duty, and Notification 67/95 provided exemption for captively consumed goods. The job worker's method of job work first and purchase later was noted, but it did not violate Central Excise law or result in revenue loss.

5. Ultimately, the Tribunal allowed the appeal, setting aside the impugned order. The judgment clarified the legal position regarding duty exemption, ownership requirements, and the interpretation of notifications, emphasizing compliance with the law and the absence of revenue loss in the case.