1987 (9) TMI 151 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty and duty on electricity generated and consumed without payment of Central Excise duty.
2. Applicability of exemption under Notification No. 52/78.
3. Bar of time for the demand of duty.
4. Sequence of events leading to the demand for duty.

Analysis:
1. The Deputy Collector imposed a penalty and ordered payment of duty on the appellants for electricity consumed without Central Excise duty payment. The Collector declined to interfere with this decision. The appeal was made against this order.

2. The Tribunal considered the exemption under Notification No. 52/78, which was previously discussed in the case of Oil India Ltd. The Tribunal rejected the appellant's contention that the exemption should apply due to the residential colony and hospital being within the factory compound.

3. The issue of time limitation for the demand of duty was raised by the appellant. The timeline of events, including notices and replies, was examined to determine if the demand was within the statutory time limit. The Tribunal noted that the issue of limitation was not explicitly addressed in previous orders but could still be considered based on available facts.

4. The sequence of events leading to the demand for duty was analyzed. The Department was made aware of the electricity supply to the residential colony and hospital in 1978. The Tribunal differentiated between duty payable before and after this knowledge date to determine the applicable limitation period.

5. The Tribunal concluded that while the liability for duty on electricity supply to the colony and hospital was confirmed, the matter was remitted to the Deputy Collector to decide which part of the claim was within the time limit. The penalty imposed was reduced to Rs. 2,000 considering the circumstances. The appeal was allowed with modifications to the lower authorities' orders.