1990 (11) TMI 262 - AT - Central Excise

Summary

Issues:
1. Condonation of delay in filing a supplementary appeal.
2. Central Excise Duty demand on excess clearances by two firms.
3. Clubbing of clearances for exemption under specific notifications.
4. Allegations of incomplete machinery and processing by the firms.
5. Time-barred demand for duty.
6. Imposition of penalty on the respondents.

Detailed Analysis:

1. The Appellate Tribunal considered the issue of condonation of delay in filing a supplementary appeal. The main appeal was filed within the statutory time limit, but the supplementary appeal was filed after the deadline. The Tribunal noted its consistent practice of condoning such delays in similar cases. Consequently, the delay in filing the supplementary appeal was condoned, and both appeals were heard together.

2. The Collector of Central Excise (Appeals) set aside the order demanding Central Excise Duty on excess clearances by two firms, along with imposing penalties. The Deputy Collector had demanded duty on excess clearances valued at Rs. 4,70,703 illicitly manufactured by the firms. The Collector of Central Excise (Appeals) reversed this decision.

3. The issue of clubbing clearances for exemption under specific notifications was examined. Both firms claimed exemption under relevant notifications for manufacturing activated carbon. The Deputy Collector had clubbed their clearances to determine eligibility for the exemption, resulting in a demand for duty. However, the Collector (Appeals) did not club the clearances, leading to a different decision.

4. Allegations of incomplete machinery and processing by the firms were discussed. Statements from partners of both firms revealed discrepancies in machinery ownership and processing activities. The Deputy Collector found that one firm was essentially processing goods for the other, leading to the decision to club their clearances for duty calculation.

5. The issue of a time-barred demand for duty was raised. The show-cause notice was issued after the statutory period of six months, leading to the Collector (Appeals) observing no evidence of suppression of facts. As a result, the demand for duty was deemed time-barred and could not be recovered from the respondents.

6. Regarding the imposition of penalties on the respondents, the Tribunal found no suppression of facts, leading to the decision to set aside the penalties. The Tribunal ultimately decided in favor of the Revenue, setting aside the duty demand as time-barred and the penalty as unwarranted, disposing of the appeals accordingly.