1993 (4) TMI 140 - AT - Central Excise

Summary

Issues:
1. Whether each unit of a State Public Sector Corporation can be treated as an independent manufacturer for the purpose of exemption under specific notifications.
2. Whether the demand issued to the appellants was time-barred.

Analysis:

Issue 1:
The case involved a dispute regarding the treatment of units of a State Public Sector Corporation as independent manufacturers for the purpose of exemption under certain notifications. The Collector had held that each unit of the corporation should be considered a separate manufacturer. However, the Tribunal disagreed, stating that the Corporation was the manufacturer for the purposes of the relevant notifications, and goods produced by various units were on behalf of the Corporation. The Tribunal found that the Collector's view was not legally sustainable, as specific provisions in certain notifications indicated that units under government control should not be treated as independent manufacturers.

Issue 2:
Regarding the time-barred demand issued to the appellants, it was argued that the show cause notice did not invoke the necessary provisions for an extended period of limitation. The appellants had consistently informed the department that they were a unit of the State Corporation. The Tribunal noted that a previous show cause notice on the same grounds had been withdrawn, and the Collector's findings were in favor of the appellants. Consequently, the Tribunal held that there was no evidence of wilful misstatement or suppression to evade duty, and the demand issued in 1984 for the period 1977-1981 was indeed time-barred.

In conclusion, the Tribunal rejected both the appeals, upholding that the units of the State Public Sector Corporation should not be treated as independent manufacturers for exemption purposes. Additionally, the demand issued to the appellants was considered time-barred due to the lack of evidence of intentional misstatement or suppression. The cross-objection filed by the respondents was deemed not maintainable, as the impugned order was entirely in their favor.