1992 (1) TMI 226 - AT - Central Excise

Summary

Issues:
1. Whether the demand is barred by limitation?
2. Whether the orders of lower authorities demanding the countervailing duty of Rs. 63,900/- and imposition of penalty on the appellant are in accordance with the law?

Analysis:

Issue 1:
The case involved a dispute regarding the demand of countervailing duty and penalty imposed on the appellants. The main contention was whether the demand was barred by limitation. The appellants had intimated a shortage of 900 M.T. of Rock Phosphate to the Central Excise authorities in December 1974. However, the show cause notice was issued only on 7-7-1975, after a period of six months. The appellants argued that the demand was time-barred. The Advocate for the appellants relied on previous decisions, including Zenith Tin Works (P) Ltd. v. Union of India & Ors., where it was held that the time limit under Rule 10 applies even prior to the introduction of the time limit amendment. The Tribunal, following this precedent, held that the demand in this case was indeed barred by limitation.

Issue 2:
Regarding the second issue, the appellants contended that the shortage of 900 M.T. of Rock Phosphate was used in the manufacture of an excess quantity of 2500 tonnes of Super Phosphate. The Department did not dispute the existence of this excess production. However, the Appellate Collector considered the appellants' plea as conjecture and uncertain. The Tribunal found this observation untenable as there was no investigation or contradiction by the Department regarding the excess production. Since the Assistant Collector did not address this aspect, the Tribunal concluded that the benefit of doubt should favor the appellants. Consequently, the demand of Rs. 63,900/- and the penalty of Rs. 250/- were set aside, and the appeal was allowed.