1986 (11) TMI 186 - AT - Central Excise

Summary

Issues:
Review of show cause notice under Section 36(2) of Central Excises and Salt Act transferred to Tribunal; Interpretation of Notification 42/75 for concessional rate of duty; Burden of proof on manufacturer for eligibility of concessional rate; Compliance with provisions of Aluminium (Control) Order, 1970; Adequacy of evidence produced by respondents; Justification of Appellate Collector's decision; Remand of the matter for re-decision.

Analysis:
The judgment involves the review of a show cause notice under Section 36(2) of the Central Excises and Salt Act, transferred to the Tribunal as an appeal against the orders of the Appellate Collector. The dispute revolves around demands raised by the Superintendent for duty on electrical grade aluminum cleared by the respondents. The Assistant Collector confirmed a duty demand of Rs. 16,34,250, alleging non-satisfaction of conditions of Notification 42/75. The Appellate Collector allowed the appeal based on the benefit of doubt regarding the Notification, considering evidence of allotment of raw materials for high tension cables.

The Government, in the review show cause, tentatively opined that the burden of proof lay on the respondents to show compliance with the Aluminium (Control) Order, 1970. The respondents argued that all allotments and disposals were in accordance with the Control Order, making them eligible for the concessional rate of duty. They contended that the Appellate Collector was satisfied with the evidence produced, including allotment orders and invoices, indicating compliance with the Control Order.

The Notification 42/75 exempts aluminum of electrical grade required by the Central Government to be supplied under the Control Order from excess excise duty. The respondents claimed compliance with the Notification based on their manufacturing of EC Grade aluminum products and strict control by the Central Government. However, the Tribunal found the evidence produced insufficient to conclusively establish compliance with the Control Order, leading to the setting aside of the impugned order and remanding the matter to the Appellate Collector for re-decision.

In conclusion, the Tribunal remanded the case for further consideration, allowing the respondents to present additional documentary evidence to substantiate their eligibility for the concessional rate under Notification 42/75. The judgment highlights the importance of satisfying the burden of proof and demonstrating strict compliance with statutory provisions to avail of duty concessions, emphasizing the need for comprehensive evidence in such matters.