1987 (9) TMI 159 - AT - Central Excise

Issues Involved:
1. Eligibility for exemption under Notification No. 71/78-C.E., as amended by Notification No. 141/79-C.E.
2. Whether the demand for duty was barred by limitation.

Detailed Analysis:

Issue 1: Eligibility for Exemption

Facts and Arguments:
The appellants were engaged in the manufacture of Synthetic Organic Dyestuffs and Synthetic Organic Products, among other excisable goods. They claimed exemption under Notification No. 71/78, as amended by Notification No. 141/79, for goods cleared during the financial year 1979-80. The exemption was contingent upon the aggregate value of specified goods cleared in the preceding financial year not exceeding Rs. 15 lakhs, and the aggregate value of all excisable goods not exceeding Rs. 20 lakhs. The appellants argued that goods falling under Tariff Item 68 should not be included in the computation of the aggregate value, as these goods were exempted by a separate notification.

Tribunal's Findings:
The Tribunal noted that according to Section 2(d) of the Central Excises and Salt Act, 1944, "excisable goods" means goods specified in the First Schedule as being subject to a duty of excise. The Tribunal referred to several precedents, including decisions by the Delhi High Court, Madras High Court, and previous Tribunal decisions, which held that goods remain excisable even if they are exempt from duty by a notification. The Tribunal concluded that the goods falling under Item 68, though exempted, were still excisable goods and their value should be included in the aggregate value for exemption purposes under Notification No. 71/78, as amended. Therefore, the appellants were not eligible for the exemption during the financial year 1979-80.

Issue 2: Limitation on Demand for Duty

Facts and Arguments:
The appellants contended that the demand for duty was time-barred as it was issued after six months. They argued that they had regularly submitted R.T.-12 monthly returns, which were assessed without any query, and had declared the goods falling under Tariff Item 68 in their classification list and in a letter dated 10.4.1979. The Department argued that the appellants had suppressed facts by not furnishing the figures of clearances in the classification list, thus justifying the extended time limit of five years for issuing the demand.

Tribunal's Findings:
The Tribunal observed that the appellants had not furnished the figures of clearances of goods falling under Item 68 in the relevant price list, despite having the information. The Tribunal referred to its earlier decision in the case of Piya Pharmaceutical Works, where it was held that failure to provide necessary declarations constituted suppression of facts, thus justifying the extended time limit for issuing the demand. The Tribunal held that there was suppression of facts on the part of the appellants, and the demand for duty beyond six months was valid.

Additional Consideration: Deduction of Excise Duty from Assessable Value

The appellants argued that if the duty demanded was to be paid, the amount of excise duty should be deducted from the assessable value. The Tribunal left this aspect for examination by the Assistant Collector of Central Excise, who was directed to consider the Supreme Court's decision in the Bata Shoe Company case and grant relief if applicable.

Conclusion:
The Tribunal upheld the impugned order, confirming that the appellants were not eligible for the exemption under Notification No. 71/78, as amended, and that the demand for duty was not barred by limitation. The appeal was dismissed, subject to the examination of the assessable value by the Assistant Collector of Central Excise.

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