1995 (3) TMI 266 - AT - Central Excise

Summary

Issues Involved:
1. Whether the CTD Bar is a separate marketable commodity and whether the process of twisting activity results in different marketable goods.
2. Whether Notification No. 202/88, dated 20-5-1988 covered the goods in question.
3. Whether Notification No. 170/89 is clarificatory in nature having retrospective effect.
4. Whether the parties are entitled to Modvat benefit.
5. Whether the demands are barred by time.
6. Whether the penalty is imposable in the present case.

Summary:

1. Whether the CTD Bar is a separate marketable commodity and whether the process of twisting activity results in different marketable goods:
The Tribunal noted the absence of sufficient evidence on trade understanding and marketability of CTD Bars. Both bars and twisted bars were classified under sub-heading 7214.90 without a separate heading for twisted bars. The Tribunal decided not to dwell on the classification issue, as the appeals could be disposed of on other grounds.

2. Whether Notification No. 202/88, dated 20-5-1988 covered the goods in question:
The Tribunal found that Notification No. 202/88-C.E. applied to bars and rods of iron either hot rolled, hot drawn, or cold finished. The CTD Bars, being cold finished, fell within the notification's ambit. The legislative intent and previous departmental circulars indicated that the goods were intended to be exempted from duty.

3. Whether Notification No. 170/89 is clarificatory in nature having retrospective effect:
The Tribunal held that Notification No. 170/89-C.E. was clarificatory, making explicit what was implicit in Notification No. 202/88-C.E. The Tribunal concluded that the subsequent notification had retrospective applicability, clarifying the ambiguity in the earlier notification.

4. Whether the parties are entitled to Modvat benefit:
The Tribunal followed its earlier rulings and held that Modvat benefit should be extended, even if procedural requirements were not followed, as the inputs had suffered duty and RT 12 returns were filed. The Tribunal found the Collector's refusal to grant Modvat contrary to established precedents.

5. Whether the demands are barred by time:
The Tribunal found that the department was aware of the manufacture of CTD Bars, and there was no suppression or mis-declaration. The Manufacturer's Association had informed the department in 1989, and there were trade circulars clarifying the non-dutiability of twisted bars. The Tribunal held that the demands were time-barred due to the bona fide belief held by both the parties and the Revenue.

6. Whether the penalty is imposable in the present case:
The Tribunal found no justification for imposing penalties, as there was no suppression or intention to evade duty. The appeals were allowed, and the impugned orders were set aside.

Conclusion:
The Tribunal allowed the appeals, set aside the impugned orders, and held that the goods were covered by Notification No. 202/88-C.E., the demands were time-barred, and the parties were entitled to Modvat benefits. No penalties were imposable.