1997 (4) TMI 149 - AT - Central Excise

Summary

Issues:
1. Eligibility for money credit scheme under Notification No. 231/87.
2. Applicability of amended para b(ii) of Notification No. 231/87.
3. Time-barred demand for money credit.

Analysis:

Issue 1: Eligibility for money credit scheme under Notification No. 231/87
The appellant challenged the order of the ld. Collector (Appeals) regarding the eligibility of the respondents for money credit under Notification No. 231/87. The ld. Collector (Appeals) held that the respondents were eligible for money credit as they fulfilled the conditions laid down in para b(ii) of the notification. The respondents were engaged in the manufacture of organic chemicals and used ethyl alcohol as raw material. They availed money credit scheme on ethyl alcohol received from a distillery outside their manufacturing unit. The ld. Collector (Appeals) concluded that the respondents met the conditions for eligibility, and thus, were entitled to the money credit under the scheme.

Issue 2: Applicability of amended para b(ii) of Notification No. 231/87
The department alleged that the money credit was not admissible to the respondents for the period before the amendment of para b(ii) of Notification No. 231/87 by Notification No. 166/88. The amendment expanded the scope of eligible units to include factories other than where the final products are manufactured. The department claimed that the respondents wrongly availed credit for the period before the amendment. However, the respondents argued that they complied with the conditions of para b(ii) during the relevant period by paying the price of ethyl alcohol to their unit. They contended that the demand was time-barred as the show cause notice was issued beyond six months, and there was no allegation of misstatement or suppression.

Issue 3: Time-barred demand for money credit
The Assistant Collector initially held that the money credit was not admissible to the respondents, confirming a demand of a specific amount. On appeal, the ld. Collector (Appeals) set aside the order, ruling in favor of the respondents. The Tribunal noted that the show cause notice was issued beyond the six-month period and that there was no evidence of suppression or misstatement. The Tribunal found that the demand was time-barred, rejecting the appeal filed by the Collector, Central Excise, Allahabad.

In conclusion, the Tribunal held that the respondents were eligible for money credit under Notification No. 231/87, the demand for money credit was time-barred, and there was no evidence of suppression or misstatement by the respondents. The appeal was rejected based on these findings.