2003 (12) TMI 161 - AT - Central Excise

Summary

Issues: Revenue appeal against dropping of duty demand as time-barred

Analysis:
The appeal was filed by the Revenue against the dropping of duty demand as time-barred in the Order-in-Original No. 2/2001. The case involved M/s. Maral Overseas Ltd., a 100% EOU, manufacturing cotton yarn, fabrics, and garments for export and domestic sale. The issue revolved around the eligibility of the company for the concessional rate of duty under Notification No. 8/97-C.E. for goods sold in the Domestic Tariff Area (DTA). The dispute arose from the use of imported raw materials like wax and other materials in the manufacturing process, which the Revenue argued made the company ineligible for the benefit under the notification. The Tribunal had previously ruled that such materials were raw materials and not consumables, thus impacting the eligibility for the concessional rate of duty.

In the de novo adjudication, the Commissioner held that as the factory was under physical control with imported raw materials received and issued under the supervision of a Customs and Central Excise officer, there was no material suppression of facts by the company. The Commissioner set aside the demand for duty for a specific period as barred by limitation. The Revenue contended that the extended period of limitation should apply due to the use of imported raw materials, which was not declared properly by the company. However, the company argued that the Central Excise officer posted at the factory was aware of the use of imported raw materials in the manufacturing process and, therefore, there was no suppression of facts.

The Tribunal considered the submissions of both parties and concluded that since the Central Excise officer at the factory was aware of the use of imported raw materials, the Revenue could not claim that the company had suppressed this fact. The Tribunal held that the extended period of limitation was not invocable in this case. Consequently, the appeal filed by the Revenue was found to be without merit and was rejected.