1984 (2) TMI 338 - AT - Central Excise

Summary

Issues:
1. Computation of limitation for filing an appeal.
2. Duty liability on goods manufactured but not fit for marketing.
3. Applicability of duty exemption notification.
4. Maintenance of statutory records for excisable goods.

Analysis:

Issue 1: Computation of limitation for filing an appeal
The Collector of Central Excise filed an appeal challenging an order dated 12-9-1983 but mistakenly mentioned the date of communication as 17-10-83 instead of 20-10-1983. The appellant argued that the date of receipt of the order should be excluded while calculating the limitation period. Referring to legal precedents, it was contended that excluding the date of receipt would render the appeal timely. Alternatively, transport difficulties on the submission day were cited as a reason for condoning the delay. The Tribunal held that the date of receipt should be excluded for computing limitation, thus accepting the appeal as within time.

Issue 2: Duty liability on goods manufactured but not fit for marketing
The respondent company manufactured certain paper varieties but did not maintain statutory records for goods not fit for marketing, leading to a duty liability of &8377; 3481.77. The company claimed the goods turned bad and were destroyed, but the Asstt. Collector demanded duty and imposed a penalty. The Collector (Appeals) accepted the company's contention, prompting the appellant to challenge the decision. It was argued that the company did not follow the prescribed procedure for goods not fit for marketing and hence was not entitled to duty exemption. The Tribunal found the Collector (Appeals) erred in law, reinstating the duty liability but waiving the penalty considering the circumstances.

Issue 3: Applicability of duty exemption notification
The appellant contended that the respondent failed to follow the prescribed procedure for goods not fit for marketing, making them ineligible for duty exemption under Notification No. 77/74. The absence of proper accounting and disposal evidence for the goods further supported the argument. The respondent, however, argued that they were not obligated to follow the specific procedure and that the Collector (Appeals) rightly accepted their claim for duty exemption. The Tribunal ruled in favor of the appellant, reinstating the duty liability due to non-compliance with statutory procedures.

Issue 4: Maintenance of statutory records for excisable goods
The Tribunal highlighted the respondent's failure to maintain necessary records as per Rule 33 of the Central Excise Rules, 1944, which led to the inability to account for the production adequately. The Collector (Appeals) erred in not considering this lapse and misinterpreted the rule regarding duty exemption for goods unfit for consumption or marketing. The Tribunal restored the duty liability but waived the penalty, emphasizing the importance of maintaining proper records for excisable goods and following statutory procedures for duty exemptions.

This judgment underscores the significance of adhering to statutory procedures, maintaining proper records, and complying with legal requirements in excise matters to avoid duty liabilities and penalties.