1987 (2) TMI 361 - AT - Central Excise

Summary

Issues:
Classification of goods under T.I. 28A, entitlement to exemption under Notification 71/78, justification of demand for the extended period, imposition of penalty.

Classification under T.I. 28A:
The dispute revolved around whether the products were correctly classified under T.I. 28A. The appellants argued that the goods were semi-fabricated components used in captive consumption for manufacturing cycle dynamos, not strictly laminations. However, the Adjudicating Authority found that the goods were indeed laminations used in building up a laminated core for a magnetic circuit in dynamos. The Tribunal observed that the products were identifiable finished goods falling under T.I. 28A, suitable for use in the production of electricity in dynamos. The Tribunal rejected the argument that the products were not marketed as laminations, emphasizing their capability for such use, and distinguished the case from a Supreme Court ruling involving crude and elementary components.

Entitlement to Exemption under Notification 71/78:
The appellants claimed the benefit of Notification 71/78, but the Adjudicating Authority considered all excisable goods under T.I. 68 for denying the exemption. The Tribunal noted that the concept of considering all excisable goods was introduced later and not under Notification 71/78. The matter of verifying the value of goods used for the period was left for the Assessing Authority to determine the applicability of the notification.

Justification of Demand for Extended Period and Penalty Imposition:
Regarding the time limit for the show cause notice, the Tribunal found that the demand for the extended period was valid, as the appellants had not obtained a Central Excise License and had suppressed facts regarding production. The Tribunal reduced the penalty from Rs. 5,000 to Rs. 1,000, considering the lack of Central Excise formalities and the appellants' failure to ascertain the excisability of the goods. The penalty was deemed justified based on the facts of the case.

Conclusion:
The Tribunal confirmed the classification of the products under T.I. 28A, directed a re-calculation of the demand, and left open the question of applying the exemption under Notification 71/78. The penalty was reduced to Rs. 1,000. The appeal was dismissed, except for the specified modifications.