1983 (8) TMI 288 - AT - Central Excise

Summary

Issues:
1. Transfer of Revision Application to Tribunal for disposal as an appeal.
2. Alleged incorrect clearance of goods at concessional rate of duty.
3. Compliance with conditions of Notification No. 50/70.
4. Discrepancy in issuance of L6 licence and CT 2 Certificate.
5. Dispute regarding the effective date of L6 licence.
6. Claim of demand being barred by limitation.
7. Compliance with Chapter X procedure under the notification.
8. Allegation of technical irregularity in clearance of goods.
9. Department's stance on the non-compliance with exemption notification conditions.
10. Tribunal's decision on technical compliance and demand for duty.

Analysis:
1. The case involved the transfer of a Revision Application to the Tribunal for disposal as an appeal, pursuant to Section 35P(2) of the Central Excises & Salt Act, 1944. The Appellate Collector had confirmed a demand for differential duty against the appellants, who were manufacturers of refrigerator parts, for allegedly clearing goods at a concessional rate of duty without fulfilling the conditions of the relevant notifications.

2. The dispute centered around the alleged incorrect clearance of goods at a concessional rate of duty. The Appellate Collector found that the clearance was not legally correct as the necessary license and certificate were not obtained before dispatch. The demand for differential duty was upheld, although no penalty was imposed.

3. The appellants contended that they had complied with the conditions of Notification No. 50/70 by filing a price-list and fulfilling the requirements for concessional duty. They argued that the consignments were despatched after due intimation to the Superintendent, and the demand for duty was unjustified, especially considering the timely application for the required license.

4. There was a discrepancy in the issuance of the L6 license and CT 2 Certificate, with the appellants asserting that the license should have been granted with retroactive effect from the date of application. They argued that the consignee had applied for the license before the goods were dispatched, and therefore, the clearance at a concessional rate was valid.

5. The effective date of the L6 license was a point of contention, with the appellants claiming that the license should have been effective from the date of application, not the date of issuance. They maintained that the consignments were despatched in compliance with the necessary procedures and documentation.

6. The appellants also argued that the demand for duty was barred by limitation, emphasizing that there was no misuse of the concessional rate and that any alleged violation should have been addressed promptly by the Department.

7. The Tribunal observed that while there were technical irregularities in the clearance process, there was factual compliance with the conditions of the notification. The Tribunal held that the demand for duty should not be sustained based on purely technical considerations, especially since there was no evidence of misuse or diversion of the goods.

8. The Tribunal ultimately allowed the appeal, setting aside the order of the Appellate Collector. They concluded that the demand for duty should not be upheld solely on technical grounds, especially considering the Department's failure to promptly address any alleged violations or seize goods for penal action. The decision was influenced by a previous Government of India ruling cited by the appellants.