1983 (5) TMI 219 - AT - Central Excise

Summary

Issues:
1. Whether the appellants were liable to pay excise duty on goods manufactured falling under different items of the Central Excise Tariff.
2. Whether the appellants were eligible for exemption under Notification No. 80/80-C.E. for specified goods.
3. Whether steel wire manufactured by the appellants was a distinct commercial product exempt from excise duty.
4. Whether the penalty imposed on the appellants was justified.

Analysis:

Issue 1:
The appellants were alleged to have clandestinely removed goods without payment of duty and committed violations under the Central Excises and Salts Act, 1944. The Collector imposed a penalty and demanded excise duty. The appellate authority granted time-bar benefit for a specific period but maintained the penalty. The appellants contended that the charge of clandestine removal was not established.

Issue 2:
The appellants claimed exemption under Notification No. 80/80-C.E. for small-scale industry units. The dispute arose regarding the aggregate value of clearances of excisable goods by the appellants in the preceding financial year. The appellants argued that the value of steel wire should not be added to the aggregate value, citing Explanation V of the notification.

Issue 3:
The Department argued that steel wire and wire rod were distinct commercial products. The Tribunal analyzed the definitions of wire rod and steel wire, concluding that they were separate products with different characteristics and uses. The Tribunal held that steel wire manufactured by the appellants attracted the provisions of the Central Excise Act and Rules.

Issue 4:
Regarding the penalty imposed, the Tribunal acknowledged the Board's findings that the charge of clandestine removal was not proven and that a significant portion of the demand was time-barred. Consequently, the Tribunal found no justification to uphold the penalty and set it aside while upholding the demand for duty.

In conclusion, the Tribunal upheld the demand for duty based on the distinct nature of steel wire as a commercial product subject to excise duty. The penalty was set aside due to the lack of justification following the findings on clandestine removal and time-barred aspects of the case.