2003 (3) TMI 222 - AT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 128/94 for exemption eligibility.
2. Applicability of exemption to intermediate products like clinker.
3. Limitation period for duty recovery.
4. Consideration of relevant case law.

Interpretation of Notification No. 128/94 for exemption eligibility:
The appeal involved a dispute regarding the interpretation of Notification No. 128/94 for exemption eligibility. The appellants, engaged in cement manufacturing, cleared cement for Earthquake Relief and Rehabilitation work under the said notification. The Department contended that the exemption was only applicable to the final product, not intermediate products like clinker. However, the Tribunal analyzed the notification and found that it exempted all goods listed in the Schedule to the Central Excise Tariff Act, including clinker used in cement manufacture. The intention was to provide relief to earthquake victims, and the exemption extended to both cement and clinker used in its production.

Applicability of exemption to intermediate products like clinker:
The Department argued that the exemption under Notification No. 128/94 did not apply to intermediate products like clinker, leading to a demand for duty recovery on clinker used in cement manufacture. The Tribunal, after considering the notification and relevant case law, disagreed with this interpretation. Citing a previous case, the Tribunal emphasized that the notification required certification only when goods were intended to be donated without charge. Since the cement was paid for, the certification requirement did not apply. Additionally, the Tribunal referred to a Supreme Court judgment stressing the need to interpret exemption notifications reasonably. Consequently, the Tribunal allowed the appeal, concluding that both cement and clinker donated for relief work were eligible for exemption under Notification 128/94.

Limitation period for duty recovery:
The appellants raised the issue of the demand being beyond the limitation period of 6 months. However, the judgment did not delve into this aspect, focusing instead on the substantive interpretation of the exemption notification and applicability to the goods in question.

Consideration of relevant case law:
The Tribunal considered relevant case law, including a decision highlighting the need to construe exemption notifications strictly but reasonably. By analyzing past judgments and the language of the notification, the Tribunal concluded that denying the exemption to clinker used in cement manufacture for relief work was unjustified. This consideration of case law reinforced the Tribunal's decision to allow the appeal and grant the benefit of exemption to both cement and clinker under Notification 128/94.