2017 (1) TMI 220 - AT - Central Excise

Eligibility of exemption - N/N. 126/78 dated 27th May 1978 - tank mastics - shalikote T-10,12, 14 and 25 - Held that - Assessee is entitled to benefit of re-computation of tax liability on shalikote as some of the varieties are exempt. Whether this will yield a refund or not is contingent on whether the tax as originally demanded had been discharged or not. In the absence of a computation as ordered by original authority, there is, as yet, no cause of action before us or before the first appellate authority. The claim of excess demand owing to error in computation of demand on clearance of tank mastic , the matter is remanded back to the original authority for considering this claim of the assessee. At the same time, the original authority is directed to re-compute the duty liability on shalikote. - matter on remand for computing the exact duty liability on all the products - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Dispute over exemption eligibility under various notifications for different products.
2. Challenge to dropping of demands by Revenue.
3. Appeal by assessee regarding duty computation and refund.

Analysis:

1. The judgment dealt with appeals challenging an order-in-appeal regarding the eligibility for exemption under various notifications for different products. The original authority had adjudicated show cause notices from September 1991 to May 1998, pending a decision on the classification of products by the Collector of Central Excise. The Collector determined exemptions except for specific products, leading to the dropping of demands except for certain duties. The issue revolved around the correct classification and exemption eligibility under different notifications.

2. The Revenue challenged the dropping of demands on certain products for a specific period, arguing that the exemption was not available and the classification had changed. However, the tribunal held that since these grounds were not invoked in the show cause notice, the adjudicating authority could not deny the exemption based on extraneous grounds. The appeal by Revenue was deemed devoid of merit in this regard.

3. The assessee also appealed, contending errors in duty liability computation and seeking refunds. The first appellate authority rejected the appeal, stating no challenge to the demand confirmation and no denial of refund computation. The tribunal noted the need for re-computation of tax liability on certain exempt products and directed the original authority to re-calculate duty liabilities. The claim for a refund of duty paid on exempt goods was dismissed due to the absence of a filed refund claim under the Central Excise Act, 1944.

In conclusion, the judgment remanded the matter back to the original authority for re-computation of duty liabilities on all products, addressing the issues raised by both the Revenue and the assessee. The appeal of the assessee was set aside, and the appeal of Revenue was dismissed.