2003 (5) TMI 162 - AT - Central Excise

Summary

Issues involved:
Interpretation of Notification No. 178/88-C.E. for untrimmed Copper circles; Clarification on 'duty has already been paid' including nil rate of duty; Time-barring of demand under Section 11A of the Central Excise Act; Imposition of penalty under Section 11AC of the Central Excise Act.

Interpretation of Notification No. 178/88-C.E.:
The appeal questioned the availability of benefits under Notification No. 178/88-C.E. for untrimmed Copper circles manufactured by the Appellants. The Appellants argued that the condition specified in the Notification, regarding goods made from copper falling within Chapter 74 of the Schedule, should include nil rate of duty as clarified by the Central Board of Excise & Customs. They also relied on a Circular and a Trade Notice to support their claim. However, the Tribunal found no evidence that the inputs had suffered nil rate of duty, thus denying the benefit of the Notification. The Tribunal also rejected the argument that the demand was time-barred, as the relevant information was disclosed after the confirmed period, following the precedent set by the Nizam Sugar case.

Clarification on 'duty has already been paid' including nil rate of duty:
The Tribunal emphasized that the benefit of nil rate of duty would only apply if the Appellants could demonstrate that the inputs had indeed suffered nil rate of duty. The Tribunal dismissed the applicability of the Board's Circular and the Trade Notice due to lack of evidence supporting the claim that the inputs had undergone nil rate of duty. Consequently, the Appellants were deemed ineligible for the benefits outlined in the Notification.

Time-barring of demand under Section 11A of the Central Excise Act:
Regarding the time limit under Section 11A of the Central Excise Act, the Tribunal ruled against the Appellants, stating that the demand was not time-barred. The Tribunal reasoned that the information crucial to the demand was disclosed after the confirmed period, aligning with the decision in the Nizam Sugar case, which allowed notices issued within five years from the relevant date in cases of suppression, misstatement, etc.

Imposition of penalty under Section 11AC of the Central Excise Act:
The Tribunal acknowledged the argument raised by the Appellants that penalty under Section 11AC could not be imposed as the relevant period predated the insertion of Section 11AC in the Central Excise Act. Consequently, the Tribunal set aside the penalty imposed on the Appellants, partially allowing the appeal on this ground.