2005 (5) TMI 174 - AT - Central Excise

Summary

Issues:
1. Limitation period for demand under Rule 9(2) and Section 11A(1).
2. Whether repacking of lubricating oil amounts to manufacture.

Analysis:

Issue 1:
The appeal questioned whether the demand made in the Show Cause Notice dated 30-3-1999, covering the period from 1-4-1994 to 28-2-1994, under Rule 9(2) and the proviso to Section 11A(1) was barred by limitation. The appellant, engaged in the manufacture of lubricating oil, contended that the demand was not sustainable as it did not fall under the categories of short levy, short payment, non-levy, or non-payment under Section 11D of the Act. The appellant cited various judgments to support their argument. The Tribunal found merit in the appellant's contentions and allowed the appeal, ruling in their favor.

Issue 2:
The second issue revolved around whether repacking lubricating oil into smaller packs amounted to manufacture until the insertion of a note w.e.f. 1-3-2000, providing a deeming fiction of manufacture. The appellant argued that as per their own case precedent, repacking did not constitute manufacture until the specified date. Additionally, they highlighted that certain provisions were not applicable based on the sale of lubricating oil from depots/SCFPS, as established in previous judgments. The Tribunal, after considering the arguments presented, concluded that the contentions raised by the appellant were valid and decided in favor of the appellant, allowing the appeal.

In conclusion, the Tribunal, comprising S/Shri S.S. Sekhon and T. Anjaneyulu, Members, ruled in favor of the appellant, M/s. Indian Oil Corporation Ltd., on both issues raised in the appeal. The Tribunal found that the demand covered by the Show Cause Notice was indeed barred by limitation and that repacking of lubricating oil did not amount to manufacture until the specified date. The Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant.