1997 (5) TMI 204 - AT - Central Excise

Summary

Issues:
1. Whether the assessee is entitled to exemption under Notification No. 74/62 as amended.
2. Whether the demand for duty payment was barred by time.

Analysis:

Issue 1:
The primary contention revolved around the eligibility of the assessee for exemption under Notification No. 74/62. The department had denied the exemption, arguing that the final products were not solely manufactured from old iron and steel scrap as required by the notification. The appellant's representative referred to a previous case before the Patna High Court, emphasizing that exemption notifications should be construed in favor of the assessee in case of ambiguity. The representative also cited various precedents and tribunal decisions to support the contention that the exemption should apply. The department's stance was that duty paid pig iron, a significant raw material, was not specified in the notification, thus disqualifying the assessee from exemption. However, the tribunal, after considering the arguments and precedents, concluded that since the notification did not explicitly mandate the exclusive use of old iron and steel scrap for the final products, the assessee was entitled to the exemption. The tribunal also highlighted the delay in issuing the notice after a court judgment, further supporting the assessee's position.

Issue 2:
Regarding the time bar issue, the appellant argued that there was no suppression of facts that warranted invoking the extended period for demand. The appellant pointed out that the notice was issued 1.5 years after a writ petition was disposed of by the High Court, indicating that the demand was barred by time. Citing a tribunal decision, the appellant contended that the extended period of limitation was not applicable when the department was aware of the assessee's operations. On the contrary, the department argued that the delay in issuing the notice was due to administrative reasons post the High Court judgment. However, the tribunal sided with the appellant, emphasizing that the department's delay in taking action rendered the demand time-barred. Consequently, the tribunal set aside the impugned order and allowed the appeal in favor of the assessee.

In conclusion, the Appellate Tribunal, considering the arguments presented and relevant legal precedents, ruled in favor of the appellant on both issues. The tribunal held that the assessee was entitled to exemption under Notification No. 74/62 and that the demand for duty payment was indeed barred by time due to the department's delayed action.