1987 (3) TMI 339 - AT - Central Excise

Summary

Issues:
1. Legality of demand of Central Excise duty
2. Eligibility for benefit of exemption under Notification 46/71
3. Grounds of limitation for raising the demand

Analysis:

1. Legality of demand of Central Excise duty:
The appeal questioned the demand of Central Excise duty totaling Rs. 8903.95 for a specific period, initially raised by the Superintendent of Central Excise and later confirmed by the Assistant Collector and the Collector (Appeals) Central Excise. The dispute revolved around the correct application of the duty and the validity of the demand.

2. Eligibility for benefit of exemption under Notification 46/71:
The appellants had availed of a concession under Exemption Notification 46/71, subject to certain conditions, including the payment of duty at a specified rate on Kraft Paper. However, the Kraft Paper purchased by the appellants did not meet this condition due to the manufacturer's exemption under Notification 128/77. Despite arguments that duty had been paid to the manufacturer, the Tribunal held that the prescribed duty condition was not met, rendering the appellants ineligible for the exemption.

3. Grounds of limitation for raising the demand:
A significant aspect raised was the limitation period for raising the demand. The show cause notice was issued for a specific period, and the appellants argued that the longer time limit of 5 years was not applicable due to the absence of misstatement, collusion, or fraud. The Tribunal agreed, noting that the Revenue failed to demonstrate the applicability of the extended time limit, thus ruling the demand as barred by the shorter time limit of six months under Section 11-A of the Central Excises and Salt Act, 1944. While finding against the appellants on merits, the demand was set aside solely on the ground of limitation, leading to a refund of the collected amount to the appellants.

In conclusion, the judgment addressed the legality of the Central Excise duty demand, the eligibility for exemption under a specific notification, and the grounds of limitation for raising the demand, ultimately ruling in favor of the appellants based on the limitation aspect while rejecting their claim on the merits of the exemption issue.