2005 (8) TMI 492 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty demand and penalty imposition on the appellant for sending raw material to job worker.
2. Challenge of the impugned order on the point of limitation.
3. Consideration of the permission granted by Revenue to the appellant for sending inputs to job worker.

Analysis:

1. The judgment addressed the confirmation of duty demand and penalty imposition on the appellant for sending raw material to their job worker. The Commissioner's order confirmed a duty demand of Rs. 4.26 lakhs and imposed a penalty of Rs. 1 lakh, citing that the appellant sent raw material, Benzene, for chlorination to the job worker. The Mono Chloro Benzene produced by the job worker was used by the appellant in manufacturing Para Chloro Benzene Sulphonamide, which attracted nil tariff rate of duty. The issue revolved around the duty liability on the Mono Chloro Benzene received back from the job worker.

2. The impugned order was challenged on the point of limitation by the appellant's advocate. The show cause notice was issued for the period 1987-89, and the appellant had obtained permission under Rule 57F(2) to send inputs to the job worker. The advocate argued that all necessary information was provided to the Revenue, and the permission was granted with full knowledge of the final product attracting nil tariff rate. The advocate contended that the longer period of limitation invoked by the Revenue was not justified, given that the permission was granted knowingly.

3. The judgment considered the permission granted by the Revenue to the appellant for sending inputs to the job worker. The correspondence between the appellant and the Revenue revealed that the permission was granted with the knowledge of the final product's duty implications. The Tribunal found merit in the advocate's argument that the Revenue could not claim mistake in granting permission and then invoke a longer period of limitation. The Tribunal held that the demand was barred by limitation and set aside the impugned order, allowing the appeal with consequential relief to the appellant.

In conclusion, the judgment analyzed the duty demand, penalty imposition, challenge on the point of limitation, and the significance of the permission granted by the Revenue to the appellant. The Tribunal ruled in favor of the appellant, highlighting the importance of the Revenue's knowledge in granting permissions and the implications on the limitation period for duty demands.