1983 (10) TMI 249 - AT - Central Excise

Summary

Issues Involved:
1. Time-bar under Rule 173PP and Rule 9(1) of Central Excise Rules.
2. Applicability of Exemption Notification No. 58/75-C.E. and subsequent notifications.
3. Definition and classification of intermediate goods under Item 68.

Issue-wise Detailed Analysis:

1. Time-bar under Rule 173PP and Rule 9(1) of Central Excise Rules:

The primary contention was whether the demand for duty was time-barred under Rule 173PP. The appellant argued that they submitted their return for the year 1975-76 on 20th February 1976, and therefore, under Rule 173PP sub-rule 10, the Central Excise had until 31st March 1977 to issue a demand. The show cause notice issued on 16-11-1977 was thus beyond the permissible period.

The Tribunal found that the Assistant Collector's order did not contradict the appellant's claim about the submission date of the return. The Assistant Collector had ruled that Rule 173PP was procedural and did not interfere with Rule 9(1), which prescribes no time limit for raising the demand. However, the Tribunal disagreed, emphasizing that Rule 173PP(10) explicitly provides for a time-bar, stating that the demand should be issued not later than one year (or six months post-August 1977 amendment) from the close of the accounting year. The Tribunal held that the demand issued on 16-11-1977 was time-barred as it was nearly two years after the close of the accounting year.

The Tribunal also rejected the argument that the time limit should be reckoned from the date of assessment, stating that the assessing officer is given a specific period within which to assess and issue a demand if necessary. The Tribunal concluded that the demand was time-barred and set aside the order of the Appellate Collector, allowing the appeal and ordering a refund of any money recovered.

2. Applicability of Exemption Notification No. 58/75-C.E. and subsequent notifications:

The appellant argued that the goods in question (coke oven gas, burnt dolomite, and blast furnace slag) were intermediate goods falling under Item 68 and were exempt under Notification No. 58/75-C.E., as amended by Notification No. 77/75-C.E. and further clarified by Notification No. 118/75-C.E.

The Appellate Collector had rejected this argument, holding that the goods did not fall under the exemption as the end product was not assessable under Item 68. However, the Tribunal did not find it necessary to delve into this issue in detail, given their decision on the time-bar issue.

3. Definition and classification of intermediate goods under Item 68:

The appellant contended that the intermediate goods used in the manufacture of other goods should be exempt under Item 68, supported by a Board judgment which took a liberal view of the term "intermediate goods." The Department argued that the goods in question were not intermediate in the manufacture of steel products and thus did not qualify for exemption.

The Tribunal did not address this issue in depth due to their ruling on the time-bar issue, which rendered further discussion unnecessary.

Conclusion:

The Tribunal allowed the appeal on the grounds that the demand was time-barred under Rule 173PP(10). The order of the Appellate Collector was set aside, and any money recovered was ordered to be refunded within three months. The Tribunal did not address the other arguments raised by the appellants, as the time-bar issue was decisive.