1983 (4) TMI 259 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 67/73-C.E. and Notification No. 152/77-C.E.
2. Eligibility of appellants for electric furnace concession.
3. Whether making wire from rods amounts to manufacture.
4. Time-barred portion of the demand under rule 10.

Analysis:
The case involved a dispute over the demand for differential duty under rule 10A of the Central Excise Rules, 1944 concerning steel wire manufactured by the appellants from duty paid steel wire rods. The appellants were asked to pay the duty difference based on the contention that they were not entitled to the electric furnace concession. The dispute revolved around the interpretation of exemption Notification No. 67/73-C.E. and subsequent changes in duty rates. The Department argued that the appellants did not have an electric furnace and thus were not eligible for the concession. However, the appellants presented evidence to show that their wire was approved for nil rate of duty and argued that making wire from rods did not constitute manufacture requiring additional duty payment.

The Appellate Tribunal analyzed the relevant provisos of Notification No. 67/73-C.E. and Notification No. 152/77-C.E. concerning the electric furnace concession. The Tribunal concluded that the concession applied to products made with the aid of electric furnace and specified materials, not necessarily limited to manufacturers with an electric furnace on-site. As the wire rods purchased by the appellants had enjoyed the electric furnace concession, the Tribunal held that the wire manufactured from these rods was also eligible for the concession. Consequently, the appellants were not liable to pay any further duty as the effective rate of duty on the wire was the same as that on the wire rods.

Additionally, the Tribunal addressed the appellants' argument regarding the time-barred portion of the demand under rule 10. The appellants contended that the demand issued after the introduction of a new rule with a reduced time limit should be considered time-barred. However, the Tribunal's decision on the eligibility for the electric furnace concession rendered this argument moot. Ultimately, the Tribunal allowed the appeal, setting aside the demand and directing for a refund if the appellants had already paid the amount.

In conclusion, the judgment clarified the interpretation of the relevant notifications, affirmed the appellants' eligibility for the electric furnace concession, and resolved the dispute in favor of the appellants, emphasizing the admissibility of the concession based on the product's manufacturing process rather than the presence of an electric furnace at the manufacturing facility.