2011 (1) TMI 1421 - AT - Central Excise

Summary

Issues involved: Determination of liability for payment of duty u/s Central Excise Act, 1985, based on manufacturing processes undertaken by the appellants; Clubbing of clearances made by different units without issuing show-cause notice.

Manufacturing Process Liability: The Revenue alleged that the appellants manufactured excisable goods beyond exemption limits without payment of duty, resulting in confirmed demands. The appellants argued that their processes of cutting, sizing, and welding iron and steel materials did not amount to manufacture, citing previous Tribunal decisions. They contended that the demand was time-barred and suppression of duty intent was not sustainable, referencing relevant legal precedents. The Tribunal found merit in the appellants' argument, noting that the processes undertaken did not amount to manufacture during the disputed period.

Extended Period of Limitation: The Revenue invoked extended limitation period due to alleged suppression of facts to evade duty payment. The appellants argued that the demand was time-barred and not sustainable based on the nature of the processes undertaken. Citing Supreme Court judgments, the Tribunal concluded that there was no willful suppression with intent to evade payment of duty during the disputed period, supporting the appellants' contention.

Clubbing of Clearances: The appellants contested the clubbing of clearances made by other units without issuing show-cause notices to those units. They argued that such clubbing without proper notice was not sustainable. The Tribunal agreed, finding that demand by clubbing clearances without issuing show-cause notices to other units was not valid. Consequently, the demand was deemed time-barred, and penalties were set aside, leading to the allowance of the appeals.