2004 (12) TMI 506 - AT - Customs

Summary

Issues:
1. Duty demand confirmation and exemption eligibility under Notification No. 2/95-C.E.
2. Imposition of penalty, interest under Section 28AB of the Customs Act, and personal penalty on the Director.
3. Interpretation of "manufacture" under Section 2(f) of the Central Excise Act.
4. Applicability of Board's Circular No. 314/30/97-C.X. and relevant case laws.
5. Bar on demand by limitation and assessment by Customs Authorities.
6. Adjudicating Officer's authority over permissions granted by the Development Commissioner.

Analysis:

1. The case involved the confirmation of duty demand amounting to Rs. 29.94 Lakhs for a specific period, with the Revenue contending that the processes undertaken by the appellant did not constitute "manufacture" under Section 2(f) of the Central Excise Act, thereby affecting their eligibility for exemption under Notification No. 2/95-C.E. Additionally, an equal penalty was imposed, along with interest under Section 28AB of the Customs Act and a personal penalty on the Director of the unit.

2. The appellant's representative argued that the processes, including slitting Jumbo Rolls into smaller rolls, sheets, and related activities, should be considered as "manufacture" based on a broader interpretation of the term. Reference was made to Board's Circular No. 314/30/97-C.X. and relevant case laws like Oracle Infotech (P) Ltd. and Super Cassettes Industries Ltd. to support this argument.

3. The appellant further contended that the demand was time-barred as the goods were cleared to D.T.A. Sales after assessment by Customs Authorities, indicating no suppression on their part. Citing the Tribunal's observations in Gujarat Texspin Ltd. v. Commissioner of Central Excise & Customs, Surat-I, it was emphasized that the Adjudicating Officer cannot challenge permissions granted by the Development Commissioner without proper recourse.

4. The learned JDR reiterated the Commissioner's findings in the Adjudication order, but upon hearing both sides and reviewing the records, the Tribunal found merit in the appellant's arguments. Considering the applicability of the cited case laws and the absence of evidence of suppression, the Tribunal decided to dispense with the duty and penalty pending further orders, scheduling a regular hearing for February 24, 2005.