1989 (1) TMI 253 - AT - Central Excise

Summary

Issues:
1. Entitlement to exemption under Notification No. 71/78-C.E. for the financial year 1979-80.

Analysis:
The case involved a dispute regarding the eligibility of the respondents for exemption under Notification No. 71/78-C.E. for the financial year 1979-80. The respondents manufactured various products and had cleared goods exceeding Rs. 20 lakhs during the financial year 1978-79. The Assistant Collector of Central Excise, Kanpur, denied the exemption, leading to an appeal by the respondents before the Collector of Central Excise (Appeals), New Delhi. The Collector (Appeals) allowed the appeal based on previous judgments. The Revenue challenged this decision, leading to the present appeal. The respondents contended that the appeal by the Revenue was time-barred and argued that Dantmanjan Lal, classified as an Ayurvedic Medicine, should be excluded from the calculation for exemption. They relied on judgments and legal provisions to support their position.

The Revenue argued that the case was supported by previous Tribunal decisions and sought to set aside the Collector (Appeals) order. The respondents reiterated their stance on the classification of Dantmanjan Lal and the effect of the Explanation to T.I. 68. They emphasized that the goods were classified under T.I. 14-E and were non-dutiable. The issue of the approved classification list and its retrospective effect was raised by the respondents. However, the Revenue objected, stating that this point was not raised before the lower authorities and should not be considered at this stage.

The Tribunal examined previous decisions regarding the classification of Dantmanjan Lal and held that it fell under T.I. 68, not qualifying for the exemption. The Tribunal also discussed amendments to Notification No. 71/78-C.E. and the implications of the added Explanation IV. It was concluded that the respondents were not entitled to the exemption for the financial year 1979-80. The demand for duty was limited to six months prior to the show cause notice, as no suppression of facts was alleged. Consequently, the appeal was allowed, subject to the limitation of the duty demand.

In summary, the Tribunal upheld the Revenue's appeal, denying the respondents' exemption claim under Notification No. 71/78-C.E. for the financial year 1979-80. The classification of Dantmanjan Lal under T.I. 68 was deemed appropriate, and the demand for duty was limited to six months prior to the issuance of the show cause notice.