1990 (2) TMI 174 - AT - Central Excise

Summary

Issues:
1. Whether "Phenol LB" qualifies as a drug for duty exemption under Notification No. 234/82.
2. Whether the demand for Central Excise duty on "Phenol LB" is time-barred.

Analysis:

Issue 1:
The case involved determining if "Phenol LB" could be classified as a drug for the purpose of duty exemption under Notification No. 234/82. The appellant, a government enterprise, manufactured "Phenol LB" under a drug license issued by the Directorate of Drug Control. The dispute arose when a show cause notice demanded duty on "Phenol LB" manufactured and cleared without payment of duty. The adjudicating authority denied duty exemption under Notification 234/82, stating that "Phenol LB" did not qualify as a bulk drug or medicine as per the notification. The appellant argued that there was no misdeclaration in the classification lists filed, citing various case laws to support their position. The tribunal found that the product had been classified as a drug in previous lists, and there was no suppression of facts, leading to the conclusion that the demand was time-barred.

Issue 2:
Regarding the second issue of whether the demand for Central Excise duty was time-barred, the tribunal examined the classification lists filed by the appellants over the years. The tribunal noted that "Phenol LB" had been consistently classified as a drug and granted duty exemption under various notifications. The tribunal also considered case laws emphasizing that the extended period of limitation could not be invoked without deliberate suppression or misstatement of facts to evade duty. As there was no evidence of suppression, and the department was aware of the facts, the tribunal held that the demands in two appeals were barred by limitation. However, in a separate appeal, the tribunal upheld the order denying duty exemption under Notification 234/82, as "Phenol LB" did not meet the criteria specified in the notification.

In conclusion, the tribunal allowed the appeals where demands were time-barred and dismissed the appeal where duty exemption under Notification 234/82 was denied.