1997 (8) TMI 141 - AT - Central Excise

Summary

Issues: Interpretation of Notification 141/72-C.E. regarding drawl of samples of tyres; Time bar plea regarding demand of duty; Imposition of penalty under Rule 173Q.

Interpretation of Notification 141/72-C.E. regarding drawl of samples of tyres:
The appellants were issued a show cause notice for not recording the removal of excisable tyres for testing in statutory records and not paying Central Excise duty as per Notification 141/72-C.E. The demand was confirmed by the Additional Collector, citing excess drawal of tyres beyond the permissible limit. The Tribunal, in a previous case, rejected the Revenue's contention that only one tyre per sort could be drawn in one day. The Tribunal held that one tyre per sort could be removed under a particular shipping order. The Tribunal further emphasized that the demand was unsustainable based on the Notification's interpretation. The Tribunal also referred to a previous order where it held that demands raised beyond six months from the date of removal were time-barred. The representative argued that the demand in the present case, from January 1981 to November 1985, was also time-barred due to being issued well beyond six months. The Tribunal agreed that the demand was time-barred and set it aside, along with the imposed penalty.

Time bar plea regarding demand of duty:
The adjudicating authority held that the appellants suppressed production figures and thus attracted the larger time limit under Section 11A(1). However, the Tribunal found that the demand for duty, covering the period from January 1981 to November 1985, was beyond the six-month limit from the date of removal, as per a previous Tribunal order. Therefore, the Tribunal set aside the demand of Rs. 3,79,544.61 as it was barred by time. The penalty of Rs. 50,000 imposed under Rule 173Q was also set aside.

Imposition of penalty under Rule 173Q:
A penalty of Rs. 50,000 was imposed under Rule 173Q. The representative argued that the penalty should be set aside along with the demand of duty, as the demand was time-barred. The Tribunal agreed that the penalty was unwarranted due to the time-barred nature of the demand and set it aside accordingly.

This judgment primarily focused on the interpretation of Notification 141/72-C.E. regarding the drawl of tyre samples, the time bar plea regarding the demand of duty, and the imposition of a penalty under Rule 173Q. The Tribunal rejected the Revenue's contention on the interpretation of the Notification, set aside the demand of duty as it was time-barred, and also annulled the penalty imposed.