1986 (2) TMI 184 - AT - Central Excise

Summary

Issues:
- Applicability of exemption Notification No. 119/75-C.E. to barley malt prepared from customer's barley.
- Whether conversion of barley into barley malt constitutes job work.
- Entitlement to benefit of exemption based on promissory estoppel.
- Interpretation of Delhi High Court judgment on barley malt exemption.
- Consideration of conflicting judgments on the issue.
- Decision on the demands for differential duty.

Analysis:

The case involved the aggrieved appellants challenging demands for differential central excise duty on barley malt prepared from customer's barley. The lower authorities had denied them the benefit of exemption under Notification No. 119/75-C.E., assessing the barley malt at its full value instead of job charge. The appellants argued that the conversion constituted job work under the notification and claimed promissory estoppel based on a confirmation from the Assistant Collector. They also cited a Delhi High Court judgment exempting barley malt from duty under a different notification. However, they did not seek a full exemption but withdrawal of the extra demands.

The department contended that barley's conversion into malt was primary manufacture, not job work, and the Assistant Collector's promise did not create promissory estoppel. They highlighted the relief already granted by the Appellate Collector on time bar grounds and referred to judgments on similar products from other High Courts. They intended to appeal the Delhi High Court judgment. The Tribunal noted the absence of contrary judgments on barley malt and decided to follow the Delhi High Court ruling, which declared barley malt fully duty-free. Consequently, the Tribunal set aside the demands, relying on the Delhi High Court judgment and granting relief to the appellants.

In conclusion, the Tribunal's decision was based on the Delhi High Court judgment exempting barley malt from duty, rendering the differential duty demands unsustainable. The Tribunal emphasized the importance of following precedents and upheld the appellants' appeal, providing them with consequential relief.