2007 (2) TMI 481 - AT - Central Excise

Summary

Issues involved: Challenge to demands and penalty for clearing steel formers for captive consumption, retrospective effect of Board's Circular, time-bar for recovery.

The appellant challenged the confirmation of demands and penalty for clearing steel formers for captive consumption. Revenue sought recovery based on Board's Circular stating that duty must be paid even for captively consumed steel formers. The appellant argued that the Circular should have retrospective effect, citing the case of H.M. Bags Manufacturer v. CCE. They also contended that the show cause notice was issued after 15 months from the Circular, and all details of captive consumption were known to the department, making the demands time-barred.

The Department reiterated its view on the matter.

Upon careful consideration, it was observed that the appellants regularly filed declarations, and the department was aware of the captive consumption of steel formers. The show cause notice for recovery was issued after 3 1/2 years, with a 15-month delay from the Board's Circular. Relying on the precedent of H.M. Bags Manufacturer v. CCE, it was held that the Circular would have retrospective effect. Consequently, the appeals were allowed, as the demands were deemed time-barred and the Circular was held to have only retrospective effect.