1980 (1) TMI 102 - CGOVT - Central Excise

Summary

Issues:
1. Review proceedings initiated by the Government of India regarding an order-in-appeal passed by the Appellate Collector of Central Excise.
2. Interpretation of Notification No. 173/68 regarding exemption for tele-communication wires and cables.
3. Requirement of end-use certificate for claiming exemption under the notification.
4. Consideration of technical evidence and design capability for determining eligibility for exemption.

Analysis:
1. The Government of India initiated review proceedings concerning an order-in-appeal passed by the Appellate Collector of Central Excise, Bombay. The show cause notice asked the assessee why the order-in-appeal should not be set aside, restoring the adjudication order passed by the Assistant Collector of Central Excise, Jamnagar. The party submitted a reply and requested a personal hearing, which was granted in Ahmedabad.

2. The central issue revolved around the interpretation of Notification No. 173/68, specifically regarding the exemption for tele-communication wires and cables. The party argued that the wires manufactured by them were exclusively designed for tele-communication use and not for over-ground applications. They contended that the wires satisfied the criteria of being tele-communication wires and being designed for overhead or underground use, as per the notification.

3. The party also challenged the requirement of an end-use certificate for claiming the exemption under the notification. They argued that since they supplied their goods to intermediary companies who further supplied to various government departments for tele-communication purposes, it was impractical to obtain end-use certificates for each supply. They emphasized that the focus should be on the design and intended use of the wires rather than proof of actual use.

4. Upon considering the arguments, technical evidence, and design capabilities presented by the party, the Government of India accepted that the wires in question were specifically designed for tele-communication purposes and could not be used for other applications. They acknowledged that it was challenging to establish a direct correlation between the factory clearances and actual end users due to the distribution chain. Therefore, the Government dropped the review proceedings and confirmed the order-in-appeal passed by the Appellate Collector, emphasizing the importance of design capability in determining eligibility for the exemption under Notification No. 173/68.