2003 (10) TMI 482 - AT - Central Excise

Issues:
Central Excise duty liability on misrolls obtained during the manufacture of bars and rods. Time-limit for demanding duty under Section 11A of the Central Excise Act.

Central Excise Duty on Misrolls:
The appeal questioned whether M/s. Rathi Super Steels Ltd. should pay Central Excise duty on misrolls produced during the manufacturing process of bars and rods. The appellant contended that they were operating under the Compounded Levy Scheme, discharging their duty liability as per Section 3A of the Central Excise Act and Rule 96ZP of the Central Excise Rules. They argued that the Department's demand for duty on misrolls from October 1997 to March 2000 was invalid due to the time-limit specified in Section 11A of the Act. The appellant highlighted that they had disclosed the existence of misrolls in their manufacturing process through various filings, including the R.T. 12 return and a classification declaration claiming the benefit of Notification No. 67/95. The appellant emphasized that the extended period of limitation for demanding duty could only be invoked under specific circumstances, such as fraud or suppression of facts, which were not applicable in this case.

Time-Limit for Demanding Duty:
The Department argued that the extended period of limitation was applicable as the appellant had not disclosed the production and use of misrolls during the relevant period. They claimed that the Department only became aware of these details when they requested production-related information from the appellant. However, the Tribunal, after considering both arguments, ruled in favor of the appellant. The Tribunal agreed with the appellant's assertion that the demand for duty was time-barred under Section 11A(1) of the Central Excise Act. The Tribunal emphasized that the provisions allowing the extended period for demanding duty could only be invoked in cases involving fraud, collusion, wilful misstatement, suppression of facts, or contravention of the Act or Rules to evade duty payment. Since the appellant had previously disclosed the use of misrolls in their manufacturing process and claimed the benefit of a specific notification, the Tribunal concluded that the extended period of limitation was not applicable. Therefore, the Tribunal set aside the impugned order and allowed the appeal solely on the grounds of the demand being time-barred.

In conclusion, the judgment by the Appellate Tribunal CESTAT, New Delhi, addressed the issues of Central Excise duty liability on misrolls during the manufacture of bars and rods and the time-limit for demanding duty under Section 11A of the Central Excise Act. The Tribunal ruled in favor of the appellant, M/s. Rathi Super Steels Ltd., stating that the demand for duty was time-barred as the extended period of limitation was not applicable due to the appellant's prior disclosure of relevant information to the Department.

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