1996 (1) TMI 247 - AT - Central Excise

Summary

Issues:
1. Assessment under Notification No. 329/77 for glass and glassware manufacturing.
2. Eligibility for lower duty rate due to manual vs. semi-automatic process.
3. Denial of concession under Notification No. 329/77.
4. Time-barred demand of duty.
5. Invocation of extended period under Proviso to Section 11A.

Analysis:

The appeal challenged an order by the Collector of Central Excise, Bombay-I, where the appellants, engaged in glass and glassware manufacturing, were found liable to pay duty at the tariff rate of 35% after installing a semi-automatic press in 1980. The appellants claimed their operations were still manual, aiming to reduce physical strain on workers and maintain uniform quality. They argued against wilful misstatement and suppression, asserting that the duty demand beyond six months from the Show Cause Notice was time-barred.

The appellants contended that even if they were ineligible for the lower duty rate under manual operations, they should benefit from exemptions for employing a semi-automatic process. However, the Collector rejected this plea, citing the sophistication of the machinery as a reason.

The Tribunal found that the installation of a mechanical press rendered the appellants ineligible for the concession under Notification No. 329/77, which applied to glassware produced by manually operated presses. The Tribunal also noted that the sophisticated nature of the machinery should not automatically disqualify the appellants from availing the lower duty rate under Notification No. 329/77 for glassware produced through a semi-automatic process.

Regarding the time-bar issue, the Tribunal rejected the appellants' claim of a bona fide belief in continuing to pay duty at a lower rate despite the operational change. The Tribunal invoked the extended period under the Proviso to Section 11A, remanding the matter to the Collector to decide on the concession under Sl. No. 1 of Notification No. 329/77 related to manufacturing through a semi-automatic process. The appellants were granted the opportunity to present additional evidence to support their case before the Collector issues orders on penalty based on the duty amount and other relevant factors.

In conclusion, the Tribunal disposed of the appeal, emphasizing the need for a reevaluation of the appellants' eligibility for the concessional duty rate under the relevant notification, while upholding the invocation of the extended period for duty demand.