1995 (12) TMI 170 - AT - Central Excise

Summary

Issues: Time Bar for Demand of Duty, Modvat Credit Utilization

Analysis:
1. The appellants were required to deposit a specific amount towards duty and penalty for hearing their appeal on merits, as per the Order-in-Original passed by the Commissioner of Central Excise & Customs.

2. The appeal was taken up for disposal on the same day as the stay application hearing due to the concise nature of arguments presented by both sides.

3. The appellants were involved in manufacturing master batches and polypropylene moulding powder, utilizing duty paid common inputs eligible for Modvat credit. However, they did not declare polypropylene moulding powder as a final product in their declaration under Rule 57G of the Central Excise Rules.

4. The facts regarding the utilization of Modvat credit were undisputed, with the advocate arguing on grounds of time bar for the demand and the availability of credit for the declared final product.

5. The JDR contended that non-declaration amounted to suppression, justifying the invocation of the extended period for demand. The credit utilized for the undeclared final product could not be revived for the declared final product.

6. The Tribunal found that while the appellants omitted to declare polypropylene moulding powder as a final product, there was no intention to evade duty. The omission did not indicate a desire to suppress the declaration for Modvat credit since the product was not legally eligible. The submission of returns and documents indicated the error could have been identified within the normal limitation period. The demand was held time-barred, and the credit could still be utilized for the declared final product.

7. The appeal was allowed solely on the ground of time bar, rendering the stay application moot and disposed of accordingly.