2000 (9) TMI 155 - AT - Central Excise

Summary

Issues involved:
The appeal filed by M/s. N.M. Nagpal (P) Ltd. questions the availability of exemption u/s Notification No. 5/98-C.E. for Cellular articles used for Conveyance & Packing of articles of plastics under Sub-heading 3923.90 of the Central Excise Tariff Act.

Details of the Judgment:

Issue 1: Exemption under Notification No. 5/98-C.E.
The appellants manufactured various products including Cellular Sheets, Helmet inserts, Styrene Monomer, Polystyrene Beads, and Cellular articles for Conveyance or Packing. They claimed exemption under Notification No. 5/98-C.E. for articles used for conveyance or packing of goods. The Commissioner denied the exemption citing non-compliance with condition No. 10 of the Notification, which prohibits availing Modvat credit on products manufactured in the same factory. The appellants argued that they did not take Modvat credit on items used in the manufacture of the impugned goods and that the condition should not apply to inputs not manufactured in the same factory. They contended that the language of conditions 9 and 10 differed significantly, and the prohibition on availing credit should only apply to goods manufactured in the same factory. The Tribunal agreed, stating that the condition did not bar availing credit on inputs used in relation to other products in the same factory. As the appellants did not avail credit on products manufactured in the same factory, the exemption under the notification was applicable to the impugned goods.

Issue 2: Time Bar for demanding excise duty
The Department invoked the extended period of limitation for demanding excise duty, alleging that the appellants suppressed facts by not declaring the manufacture and clearance of goods falling under sub-heading 3923.90. However, the Tribunal found that the appellants had consistently filed declarations and reports for various products, including the impugned goods. The Tribunal noted that the declaration filed in 1997 clearly mentioned the manufacture of goods falling under specific headings. As there was no evidence of deliberate evasion, the extended period of limitation was deemed inapplicable, and the impugned order was set aside both on merits and time bar grounds.

In conclusion, the Tribunal ruled in favor of M/s. N.M. Nagpal (P) Ltd., allowing the exemption under Notification No. 5/98-C.E. for Cellular articles used for Conveyance & Packing of articles of plastics and rejecting the invocation of the extended period of limitation for demanding excise duty.