1985 (7) TMI 352 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 154/75-C.E. regarding differential duty on matches exceeding clearance limits.
2. Time limitation for demanding the payment of differential duty.

Analysis:

Issue 1: Interpretation of Notification No. 154/75-C.E.
The case involved the appellants manufacturing matches and paying duty at a concessional rate under Notification No. 154/75-C.E. The dispute arose when the appellants crossed the 75 million mark in clearances, triggering the duty payment at a higher rate. The main contention raised was whether differential duty could be demanded for all clearances from 1-4-1979 if the total clearances exceeded 100 million matches or only if they exceeded 75 million matches. The Tribunal analyzed the relevant clauses of the notification and held that the differential duty could be demanded if the total clearances exceeded 75 million matches, even if they did not reach 100 million matches. The Tribunal rejected the appellant's argument that both the 10 million mark in a month and 100 million mark in a year must be crossed for full duty payment to apply.

Issue 2: Time Limitation for Demanding Differential Duty
The second contention raised was regarding the time limitation for demanding the payment of differential duty. The appellants argued that the demand for differential duty was time-barred for the period exceeding six months before the show cause notice issued on 2-4-1980. The Tribunal examined the applicability of Rule 10, which sets a six-month limitation period for such demands. It was established that the right to demand differential duty arose when the appellants exceeded the 10 million mark in October 1979. The Tribunal determined that the show cause notice issued on 2-4-1980 was within the six-month period from when the right to demand the duty arose, thus rejecting the contention that the demand was time-barred. The Tribunal also cited previous decisions supporting this interpretation of the limitation rule.

In conclusion, the Tribunal found both contentions raised by the appellants to be incorrect. Therefore, the Tribunal confirmed the orders of the lower authorities and dismissed the appeal.