1996 (10) TMI 242 - AT - Central Excise

Summary

Issues Involved:
1. Availability of the benefit of Notification No. 8(9)/55-C.E.
2. Whether the appellants were manufacturers of Bituminised hessian/cotton cloth paratape and parafluxal.
3. Applicability of the extended period of 5 years u/s 11A.
4. Imposition of penalty twice.

Summary:

1. Availability of the benefit of Notification No. 8(9)/55-C.E.:
The appellants contended that the benefit of Notification No. 8(9)/55-C.E., dated 31-12-1955, as amended, should be available to them. The Tribunal held that the notification was conditional, and the conditions were not fulfilled by the appellants. However, it was found that bitumen aqueous emulsion cleared for surfacing roads is covered for exemption under the notification, but not for roofing purposes due to lack of evidence.

2. Whether the appellants were manufacturers of Bituminised hessian/cotton cloth paratape and parafluxal:
The Tribunal determined that the appellants were indeed the manufacturers of bituminised hessian/cotton cloth. Despite the appellants' argument that they were merely job workers and the suppliers of raw materials were the actual manufacturers, the Tribunal relied on the Supreme Court's decision in Ujagar Prints Ltd., concluding that the job worker is the manufacturer.

3. Applicability of the extended period of 5 years u/s 11A:
The Tribunal found that the demand was time-barred. It was noted that during the material time, it was understood that the supplier of raw materials was the manufacturer. The Tribunal agreed with the appellants that the demand was hit by limitation, referencing the Supreme Court's ruling in Pushpam Pharmaceuticals.

4. Imposition of penalty twice:
Given that the major part of the demand was not enforceable on merits and was also time-barred, the Tribunal set aside the imposition of the penalty.

Conclusion:
The Tribunal held that:
- Conversion of bitumen into bitumen emulsion amounts to manufacture.
- Exemption under Notification No. 8(9)/55-C.E., dated 13-12-1955, is admissible for bitumen aqueous emulsion cleared for road surfacing.
- The appellants are the manufacturers of bituminised hessian/cotton cloth.
- Valuation of the goods should follow the law laid down in the Ujagar Prints case.
- The demands are time-barred as they are beyond 6 months.
- The penalty imposed is set aside.

The impugned order was modified accordingly, and the appeal along with the Misc. Application No. E/550/Misc./96-C was disposed of.