2004 (10) TMI 358 - AT - Central Excise

Summary

Issues:
1. Demand of duty on parts of Light Recovery Vehicles.
2. Barred by limitation.
3. Excisability of the parts in question.
4. Benefit of exemption under Notification 67/95-C.E.
5. Penalty imposition and reduction.

Analysis:

1. The judgment involves the confirmation of a duty demand on parts of Light Recovery Vehicles under Chapter Heading 87.08 manufactured and cleared for captive consumption. The demand was raised due to the denial of exemption under Notification 67/95-C.E. as the parts were used in the manufacture of special purpose motor vehicles exempt from duty under specific notifications.

2. The contention regarding the limitation period is examined, where the appellants argued that most of the demand is time-barred. However, the Tribunal rejected this argument, stating that the demand was not barred by limitation as the Department became aware of the captive consumption of parts through statements of company officials in 1999 and 2001, despite not being explicitly declared in the classification declaration.

3. The issue of excisability of the parts in question is addressed, with the Tribunal dismissing the appellant's claim that the parts were not marketable. The Additional Commissioner and Commissioner (Appeals) found the parts identifiable and capable of being bought and sold, leading to the conclusion that the parts were excisable goods falling under Chapter Heading 87.08.

4. The Tribunal upholds the disallowance of the benefit of exemption under Notification 67/95-C.E. to the appellants due to the use of excisable parts in the manufacture of duty-exempt special purpose motor vehicles. The decision is based on the clear identification of the parts and their use in exempted vehicles, aligning with the previous rulings of the Additional Commissioner and Commissioner (Appeals).

5. In the final analysis, the Tribunal determines the duty demand and penalty to be sustainable. However, considering the circumstances of the case, the penalty is reduced to Rs. 50,000 from the original amount. The appeal is partly allowed, affirming the duty demand while adjusting the penalty amount based on the totality of facts and circumstances presented during the proceedings.