1996 (12) TMI 190 - AT - Central Excise

Summary

Issues: Stay application regarding duty exemption, time limitation for demand, proper service of show cause notice, suppression of facts, assessment based on hypothetical figures, exemption under Notifications 115/75 and 175/86, classification of product as excisable, non-cooperation of appellants, waiver of predeposit of amounts.

Analysis:
1. Stay Application and Duty Exemption: The appellants manufactured coir products exempt from duty under Notification 115/75. They argued that a solution they used was not excisable. The Department issued a show cause notice in 1994, alleging duty evasion related to a rubber compound. The appellants contended the notice was time-barred, received only in 1995, and they had not suppressed any facts.

2. Time Limitation for Demand: The appellants claimed the demand for the period 1-8-1989 to 28-2-1990 was time-barred as the notice was received late. They argued that no suppression of facts occurred, citing a Supreme Court judgment on the matter.

3. Proper Service of Show Cause Notice: The appellants disputed the proper service of the show cause notice, stating that it was pasted at a closed factory gate, making it improperly served. They only received the notice in June 1995 at a residential address.

4. Suppression of Facts and Assessment: The appellants argued that the Department raised the demand based on hypothetical figures without proper assessment. They contended that the product in question was not a rubber compound and no sample was drawn or tested to establish its nature.

5. Exemption under Notifications: The appellants claimed exemption under Notification 115/75 for coir industry products and under Notification 175/86 for production within the exemption limit. They highlighted the exclusion of Heading 4005.00 in the amended Notification.

6. Classification of Product as Excisable: The Department classified the product as excisable under Heading 40.05, contending it was an intermediate product. They opposed the appellants' claim of exemption and argued that the adjudicating officer relied on technical literature and not just test results from another factory.

7. Non-Cooperation of Appellants: The Department noted the appellants' non-cooperation in providing information and maintaining records, causing delays in the investigation. They conducted inquiries using best judgment assessment due to lack of cooperation.

8. Waiver of Predeposit: Considering the factory's closure and the arguable nature of the case, the Tribunal waived the predeposit of amounts subject to the appellants depositing a specified sum within a timeframe. Non-compliance would lead to dismissal of the appeal without further notice.