1986 (8) TMI 312 - AT - Central Excise

Summary

Issues Involved:
1. Applicability of exemption u/s Notification No. CER-8(28)/56, dated 5-1-1957.
2. Joint and several liability for duty payment.
3. Validity of penalties and confiscation orders.
4. Jurisdiction of the adjudicating officer.
5. Applicability of Rule 9(2) and Rule 10A(1) concerning the limitation period.

Summary:

1. Applicability of Exemption u/s Notification No. CER-8(28)/56, dated 5-1-1957:
The main issue was whether the exemption granted to certain types of cotton fabrics under Notification No. CER-8(28)/56, dated 5-1-1957, was applicable to the cotton fabrics produced on the 16 powerlooms in the appellants' four units. The lower authorities concluded that the four units were functioning as a single entity, thus not entitled to the exemption. However, the Tribunal found that the four units were independent legal entities, with separate accounts and periodic adjustments, and thus eligible for the exemption.

2. Joint and Several Liability for Duty Payment:
The Officer on Special Duty had imposed a joint and several liability for duty payment on the four owners. The Tribunal, however, found that the units were functioning independently, and there was no basis for imposing joint liability.

3. Validity of Penalties and Confiscation Orders:
The lower authorities had imposed penalties and ordered the confiscation of goods. The Tribunal set aside these orders, concluding that the units were independent and thus not liable for penalties or confiscation.

4. Jurisdiction of the Adjudicating Officer:
A contention was raised regarding the jurisdiction of Shri R.B. Sinha, Officer on Special Duty, to conduct the adjudication. The Tribunal noted that this issue was not raised at any earlier stage and thus did not pursue it further.

5. Applicability of Rule 9(2) and Rule 10A(1) Concerning the Limitation Period:
The demand under Rule 9(2) was contested as being barred by limitation. The Department agreed that Rule 9(2) would not apply but contended that Rule 10A(1) would apply. The Tribunal found it unnecessary to consider this question due to its findings on the merits of the case.

Conclusion:
The Tribunal allowed all five appeals, setting aside the orders of the lower authorities, and provided consequential relief to the appellants. The Tribunal concluded that the four units were functioning independently and were entitled to the exemption under Notification No. CER-8(28)/56, dated 5-1-1957.