1985 (8) TMI 190 - AT - Central Excise

Summary

Issues:
1. Assessment of duty on blowers used in the manufacture of transformer oil coolers.
2. Validity of demand beyond a period of six months.
3. Request for set-off of duty paid on motors used in the manufacture of blowers.

Detailed Analysis:
1. The Collector of Central Excise ordered duty payment by Universal Radiators Ltd. for blowers used in transformer oil coolers. The appellants converted motors into blowers and supplied them to I.C.F. The Department alleged non-declaration of blower manufacture. The show cause notice invoked extended period under Rule 9(2). Three points were raised on appeal: assessment of blowers under Tariff Item No. 33(2), demand validity beyond six months, and set-off of duty paid on motors used in blower manufacture.

2. The first point was not pursued during the hearing. Regarding the second point, the appellant argued for set-off under Notification No. 124/65, rescinded by Notification No. 113/80. The Collector rejected the set-off request due to lack of correlation evidence between motors and industrial fans. The Tribunal found that duty exemption under Notification No. 124/65 was valid until 31-7-80. After 19-6-80, Rule 56A procedures must be followed for duty credit on imported motors.

3. The appellant claimed exemption based on a 1978 declaration to the Department. The Department's inaction on licensing implied acceptance of the appellant's stand. However, a revised exemption scheme in 1979 required compliance. The Tribunal held that the 1978 declaration did not cover fan manufacture. Failure to declare fans violated Central Excise Rules. The demand for duty beyond 1979 was upheld under Rule 9(2), but demands for 1976-77 and 1977-78 were not sustainable due to lack of intimation to the Department.

4. The Tribunal upheld the Collector's order with a modification allowing duty set-off for special motors used in blower manufacture during 1977-78 and 1978-79. The appeal was allowed for the year 1976-77 under Notification No. 124/65.