1984 (7) TMI 361 - AT - Central Excise

Summary

Issues Involved:
1. Inclusion of reprocessed cement in the total clearance for concessional duty under Notification 198/76-C.E.
2. Time-barred demand for duty recovery.

Summary:

1. Inclusion of reprocessed cement in the total clearance for concessional duty under Notification 198/76-C.E.:

201.10 tonnes of cement cleared on payment of duty by M/s India Cements Limited were reprocessed and cleared again without payment of duty in October 1978. The factory included this cement in its figures for computing the total clearance for the year 1978-79 under Notification 198/76-C.E. The Assistant Collector and the Appellate Collector rejected this inclusion, stating that non-duty paid clearances were not entitled to the concessions under Notification 198/76-C.E.

The learned Counsel for M/s India Cements Ltd. argued that the notification did not specifically exclude reprocessed cement cleared under Rule 96ZV from its benefits. The counsel for the department countered that Rule 96ZV referred to "delivery" and not "clearance," and the notification only applied to goods-clearances, not deliveries. The Tribunal agreed with the department's interpretation, stating that the scheme under Notification 198/76-C.E. was to encourage production, not merely clearances. Therefore, reprocessed cement could not be included in the clearances for concessional duty.

2. Time-barred demand for duty recovery:

During the argument, it was revealed that the demand made by Central Excise for recovery of Rs. 3,431.26 from M/s India Cements Limited was time-barred. The demand was issued on 16-10-1979, while the factory reached the base clearance on 17-2-1979. The Tribunal noted that the demand was issued outside the six-month time limit stipulated in Rule 10 of the Central Excise Rules.

The duty demanded was paid by the factory under protest. The Tribunal discussed whether the Central Excise should return the money recovered under a time-barred demand. The majority opinion held that since the money was lawfully due to the department and was paid voluntarily, even if under protest, it should not be refunded. The dissenting opinion by G. Sankaran argued that the demand was clearly hit by limitation and the amount paid should be refunded to the appellants.

Conclusion:

The appeal was rejected based on the majority opinion that the factory was not entitled to include the 201.10 tonnes of reprocessed cement in the clearances for concessional duty under Notification 198/76-C.E., and the time-barred demand for duty recovery was lawfully receivable by the department.