1988 (9) TMI 142 - AT - Central Excise

Summary

Issues:
1. Whether the credit of Central Excise duty on specific materials used in the manufacturing process can be adjusted against the duty payable on the finished product under a particular notification.
2. Whether the demand for duty is time-barred.

Analysis:
1. The appeal involved the question of whether the credit of Central Excise duty paid on nickel catalyst and activated bleaching earth, used in the manufacture of a vegetable product, could be adjusted against the duty payable on the finished product under a specific notification. The Collector (Appeals) held that these materials were not used as raw materials of the finished product, thus not meeting the essential requirement of the Notification No. 201/79-C.E. The appellants argued that the materials should get the benefit of exemption under the notification as amended. The Tribunal referred to previous cases and held that the inputs were neither raw materials nor component parts of the vegetable product, thus denying the benefit of the notification to the appellants.

2. Regarding the issue of limitation, the demand for duty was challenged by the appellants on the grounds of being time-barred. The Collector (Appeals) rejected the plea of limitation, stating that there was no time limit for raising the demand under the relevant paragraph of the notification. However, the Tribunal held that the time-limit prescribed in Section 11-A of the Central Excises and Salt Act was applicable. Relying on precedent, the Tribunal limited the demand to six months prior to the date of the show cause notice, as there was no allegation of misstatement or suppression of facts warranting a longer time limit. The impugned order was modified to reflect this decision, upholding the appeal dismissal on merit but limiting the demand period to comply with the statutory time limit.