1994 (2) TMI 166 - AT - Central Excise

Summary

Issues: Eligibility for money credit scheme for Paraldehyde and Solvent-75 under Notification No. 231/87. Time limitation for recovery of duty.

Eligibility for money credit scheme for Paraldehyde:
The appeal concerned the eligibility of the appellants for the benefit of the money credit scheme under Notification No. 231/87 for "Solvent-75" and Paraldehyde. The Department contended that the benefit was not available as these final products were not specified in the notification. The appellants argued that Paraldehyde was a by-product of Acetaldehyde and should be eligible for the scheme. The Tribunal analyzed the manufacturing process of Paraldehyde, its distinct properties, and classification under Heading 2912.00 of the CTA, establishing it as a finished product. The Tribunal cited technical literature describing Paraldehyde's chemical properties and various uses, confirming its status as a final product. The Tribunal rejected the appellant's argument that Paraldehyde should be covered under the scheme due to its relationship with Acetaldehyde, emphasizing that the scheme applied only to specified final products, thus denying the benefit for Paraldehyde.

Eligibility for money credit scheme for Solvent-75:
The Tribunal also examined the eligibility of Solvent-75 for the money credit scheme. The appellants described the manufacturing process of Solvent-75 involving the treatment of impurities from the production of other chemicals, resulting in a distinct commercial product. The consumption factor of ethyl alcohol in Solvent-75 was calculated based on the appellants' submission. Despite the Chemical Examiner's report on the inability to determine individual constituents of Solvent-75, the Tribunal determined it to be a final product under Heading 2905.90. As Solvent-75 was not specified as a final product in Notification 231/87, the Tribunal ruled that the benefit of the money credit scheme was not applicable for its clearance.

Time limitation for recovery of duty:
The appellants argued that the demand for duty was partly time-barred as the show cause notice was issued after a significant period. The lower appellate authority differentiated the provisions for recovery of wrong credit under Rule 57-P from those under Rule 57-I and Rule 9(2). It held that no limitation applied to the recovery of wrong credit under Rule 57-P falling under Section AAA of the Central Excise Rules. The Tribunal concurred with this view, ruling that the demand was not time-barred.

Conclusion:
The Tribunal upheld the impugned order entirely, rejecting the appeal and affirming the denial of the money credit scheme benefits for Paraldehyde and Solvent-75. Additionally, it determined that the demand for duty was not time-barred based on the relevant provisions of the Central Excise Rules.