1988 (2) TMI 176 - AT - Central Excise

Summary

Issues:
- Interpretation of Notification No. 198/76 regarding the inclusion of regulators under the term "Electric Fans all sorts"
- Question of limitation period for the demand raised by the respondents

Interpretation of Notification No. 198/76:
The case involved a dispute over whether the term "Electric Fans all sorts" in Notification No. 198/76 included regulators. The Assistant Collector initially ruled that the concessional rate of duty did not extend to regulators. However, the appellate order favored the respondents, extending the benefit of the exemption notification to regulators based on the change brought about by the Finance Act of 1977 to Item No. 33(D) CET. The key argument by the Learned SDR was that the notification mentioned only "Electric Fans all sorts" at Serial No. 32, and the change in Tariff Item No. 33 did not modify the entry related to Electric Fans. The SDR emphasized strict interpretation of notifications and cited legal cases to support the argument. On the other hand, the respondents' consultant argued that the term "fan" included regulators even before the amendment, citing an Andhra Pradesh High Court judgment. The Tribunal analyzed the arguments and held that the notification only covered fans and not regulators, based on the ordinary meaning of the words used and the absence of legislative intent to include regulators.

Limitation Period for Demand:
Regarding the limitation period for the demand raised, the Assistant Collector had extended it to five years based on alleged willful payment of less duty by the respondents. However, the Tribunal disagreed, finding no proof of willfulness on the respondents' part. The Tribunal noted that the respondents had recorded the removal of regulators without full duty payment in their returns, indicating no attempt to conceal information. As a result, the Tribunal ruled that only the normal limitation period should apply, limiting the demand to six months before the show cause notice was issued. The impugned order was modified accordingly, with Notification No. 198/76 deemed not applicable to regulators, and the demand restricted to a shorter period.