1983 (1) TMI 182 - AT - Central Excise

Summary

Issues:
Classification of coloured polystyrene compounds under Tariff Item No. 68, applicability of excise duty, time-barred demands, interpretation of Tariff Item 15A(l)(ii) of Central Excise Tariff, plea of limitation.

Analysis:
The judgment involves two appeals presenting common questions of fact and law, originating from show cause notices proposing to classify coloured polystyrene compounds under Tariff Item No. 68. The appellants manufacture polystyrene and colour a part of it for further treatment. Previous orders classified coloured polystyrene as excisable under Tariff Item No. 15A(l)(ii), upheld by the Appellate Collector and Government of India. A subsequent dispute arose post a Delhi High Court decision, leading to new show cause notices and appeals challenging the classification under Tariff Item 68.

The appellants contended that coloured polystyrene remains under Tariff Item 15A(l)(ii) even after colouring, disputing the Revenue's classification under Tariff Item 68. The Revenue argued for duty on coloured polystyrene cleared from the factory, not captively consumed. The Tribunal, considering past decisions and submissions, rejected the classification under Tariff Item 68, accepting the appellants' classification under Tariff Item 15A(l)(ii). The judgment focused on whether the demand under Tariff Item 68 could be enforced post the new classification.

Regarding the plea of limitation, the Tribunal applied the time limits under section 11A of the Central Excises and Salt Act, 1944. Show cause notices lacked elements for invoking the extended time limit, leading to a six-month limit for demands. Duties exceeding this limit for specific periods were set aside, while demands within the limit were reworked under Tariff Item 68 and then under Tariff Item 15A(l)(ii). The judgment restricted demands to within the limitation period, aligning with the duty payable under Tariff Item 68, despite calculations based on Tariff Item 15A(l)(ii).

In conclusion, the Tribunal partially allowed the appeals, setting aside demands exceeding the limitation period and recalculating duties based on the revised classification under Tariff Item 15A(l)(ii) for the remaining periods within the limit. The judgment emphasized the authority of courts and tribunals to adjust relief as per the demands of justice, ensuring appropriate application of legal provisions and procedural safeguards.