1989 (5) TMI 220 - AT - Central Excise

Summary

Issues: Classification of monofilament yarn, eligibility for exemption under Notification No. 194/72 and Notfn. No. 242/79, time bar for duty demand, alleged suppression of facts

Classification of Monofilament Yarn and Eligibility for Exemption:
The appeal before the Appellate Tribunal CEGAT, Bombay centered on the classification of monofilament yarn manufactured by the applicants and their eligibility for exemption under Notification No. 194/72 and Notification No. 242/79. The contention arose from the admixture of LDPE granules with HDPE, with LDPE content ranging from 35% to 46%. The Collector's order highlighted the LDPE admixture but acknowledged that even a 20% LDPE mixture would still be eligible for exemption. The Tribunal observed that the LDPE content and its impact on the essential character of the yarn would be a crucial issue for the appeal hearing. The Collector's assertion of suppression based on the lack of declaration of HDPE/LDPE mixture as raw material was challenged, noting that there was no specific column in the declaration for such details. The records maintained by the applicants indicated the LDPE percentage, which was available for departmental verification during adjudication.

Time Bar for Duty Demand and Alleged Suppression of Facts:
Regarding the time bar for duty demand, the Tribunal referred to a Supreme Court judgment emphasizing that conscious and deliberate suppression of facts is required beyond mere inaction to allege suppression. The Tribunal found that the demand beyond a six-month period was time-barred, indicating a duty amount of approximately Rs. 22 lakhs for the preceding six months. Considering the financial constraints of the applicants, a stay was granted upon depositing Rs. 5,00,000 in cash, with a waiver of recovery for the balance duty amount. The applicants were given eight weeks to make the deposit, failing which their appeal would face rejection.

Conclusion:
In conclusion, the Tribunal addressed the issues of classification, exemption eligibility, time bar for duty demand, and alleged suppression of facts in the appeal. The decision highlighted the LDPE admixture in the monofilament yarn, the lack of specific declaration columns, the time-barred nature of the duty demand, and the financial circumstances of the applicants in granting a stay with a deposit requirement. The judgment provided a detailed analysis of each issue raised during the proceedings before the Appellate Tribunal CEGAT, Bombay.